Article 5 Reporting of suspicious orders or transactions

To ensure that prevention and detection of market abuse is effective, appropriate systems should be in place to monitor orders, transactions and other aspects of functioning of the DLT, in accordance with the scale, size and nature of the business activity of the person professionally arranging or executing transactions. Such systems should provide for human analysis carried out by appropriately trained staff based on objective information at the disposal of the reporting entity. The entity should collect additional personal data, only to ensure appropriate human analysis. To allow for further analysis of potential insider dealing or market manipulation or attempted insider dealing or market manipulation, the systems for monitoring market abuse should be capable of producing alerts in line with specified parameters. The access to such alerts should be recorded to ensure that they are only used for detecting market abuse. The whole process is likely to require some level of automation.

To facilitate and promote a consistent approach and practices across the Union in relation to the prevention, detection and sanctioning of market abuse, it is necessary to lay down detailed provisions harmonising the content of, the template for and the timing of the reporting of suspicious orders and transactions and other aspects of the functioning of DLT.

Crypto asset service providers operating a trading platform should have appropriate trading rules that contribute to the prevention of market abuse. Those entities should also have facilities to replay the order book in order to analyse the trading activity.

A single and harmonised template for electronically submitting a suspicious transaction and order report (‘STOR’) should facilitate the efficient sharing of information on suspicious orders and transactions between competent authorities in cross-border investigations.

To facilitate the submission of a STOR, the template should allow for the attachment of documents and materials that are necessary to support the notification made, including in the form of an annex that lists the suspicious orders or transactions and detailing their prices and volumes. In addition, the STOR template should allow for the reporting of suspicious behaviours connected to the functioning of the DLT.

The analysis of orders, transactions or other aspects of the functioning of the DLT should factor in not only the internal information of the person professionally arranging or executing transactions in crypto-assets, but all the information publicly available, including information about transactions embedded in a public ledger system.