In some incidents of manipulating the futures market, brokerage companies or exchanges should support, cooperate and condone the manipulation of the futures market by giving customers or brokerage companies huge overdrafts, forcibly closing positions and other illegal operations; Under various pretexts, the exchange even abused emergency measures or temporary measures, adjusted the price limit, increased the margin ratio, restricted the deposit and withdrawal, closed the position within a time limit or forcibly closed the position to support bulls or bears to manipulate the market. In fact, without the support, cooperation and connivance of brokers or exchanges, it is impossible for customers or brokers to implement a series of subsequent market manipulation behaviors; Without the policy support and acquiescence of the exchange, it is difficult for market manipulation to be beyond measure.
From the "Sumitomo Copper Incident", it can be seen that LME's imperfect internal risk control system contributed to the occurrence of risks. Since 199 1, LME has continuously received news that Ta Daobin intends to manipulate the price of copper. However, due to the loopholes in the internal management mechanism of the exchange, especially the market risk monitoring ability, these news have not been paid enough attention for a long time. It was not until1995165438+10 that LME authorities began to investigate the market under the pressure of the international copper association and the American regulatory agency CFTC. From this point of view, it is the lack of internal control system of exchange risk that leads to the serious consequences of the whole Sumitomo Copper Incident. In addition, similar risk events occurred in LME, such as 1985 tin market default event and 1993 trader juan Pablo Davila's unauthorized transaction, resulting in a loss of nearly $200 million for Chilean state-owned copper company Codel.
(2) The perfection of the internal risk management mechanism of futures brokerage companies is helpful to control the manipulation risk.
On the other hand, the "Sumitomo Copper Incident" was also caused by poor internal management of Sumitomo. Before the incident, Binzhongnan was the direct manager of the company's copper futures trading, and all the company's risk control measures, financial management system and market monitoring means were mainly based on him, completely independent of the company's supervision and management. The problems existing in Sumitomo Trading Company show that there must be strict internal management, so that managers and companies will not be deceived by the rhetoric of any trader.
Brokerage companies are the bridge between exchanges and customers, and indispensable intermediaries to increase market liquidity and coverage. The quality of risk control of brokerage companies will directly affect the stability and standardization of financial derivatives transactions. Leo Melamed once expressed his views on the risk management of financial institutions, including brokerage companies: "The lack of internal management of financial institutions will only bring bad consequences." Therefore, the perfection of risk management mechanism of futures brokerage companies is helpful to prevent market manipulation risks.
As a commodity trading consultant and commodity fund operator of CFTC, Fenchurch Register engages in a large number of futures trading activities in the spot and futures markets of US government bonds. On July 1996 and 10, CFTC announced that it had passed the administrative lawsuit against Chicago Finch Capital Management Company. At the same time, CFTC accepted Fenchurch's mediation request, paid $600,000 as a civil fine and took remedial measures.