UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

Mr Kasapis relied on the Overlapping Small Orders as a reason why the Large Orders were unlikely to have been placed with the intention of moving the market towards the Small Orders, as in doing so the Traders would have also moved the market away from these Overlapping Small Orders, making these orders less likely to trade.

Mr Shivji submitted that many of these were very far from the touch and placed long before the relevant Trading Instance started – in other words, what he termed “legacy” orders that were not a priority for the relevant Trader. Mr Shivji criticised Mr Kasapis for not having looked at the price levels of these orders in his analysis, submitting that the price and timing was fundamental to analysing the relevance of these orders - if they were not a priority for the Traders at the time of the Instance, there is no reason at all why they should be illuminating when analysing their behaviour during the Instance.

Whilst Mr Shivji criticised the exercise undertaken by Mr Kasapis, the Authority has not provided any additional analysis to support its description of the Overlapping Small Orders as being “legacy” orders. We agree with Mr Kasapis that these have potential to be significant, and we have sought to assess what evidence we do have about those orders listed by Mr Kasapis in his report.

The Tribunal identified that the check said to have been done by Mr Kasapis was whether the Overlapping Small Order was live whilst the Small Order was live on the opposite side of the book. The Tribunal considered it more relevant whether the Overlapping Small Order was live whilst the Large Order relied upon by the Authority was live on the same side of the book, on the basis that the Authority’s argument was that the Large Order would be pushing the market away from that Overlapping Small Order (and that this was the intended effect of the Large Order).

The Overlapping Small Orders appear in a number of Instances and occur throughout the Relevant Period (from 10 June to 27 July 2016) and were placed by all three Traders, including those where the Trader placing the Large Order in an Instance had placed the order that became the Overlapping Small Order in the relevant Instance.