Front-running: Difference between revisions
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imported>John Grout (To add reference to need to distnguish pre-hedging) |
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''Conduct risk - financial markets'' | ''Conduct risk - financial markets'' | ||
In financial services, front-running is the | In financial services, front-running is the unethical and likely criminally fraudulent practice of buying securities or making other trades to take advantage of private/confidential knowledge of a future event, for example a large purchase order from a client - an order for currency, shares, commodities, etc. | ||
Distinguishing front-running (unacceptable, probably illegal) from [[pre-hedging]] (probably | Distinguishing front-running (unacceptable, probably illegal) from [[pre-hedging]] (probably acceptable, even legal) is important for all concerned, but can be very difficult. | ||
==See also== | ==See also== | ||
* [[Conduct risk]] | * [[Conduct risk]] | ||
* [[ | * [[Financial Markets Standards Board]] (FMSB) | ||
* [[Insider dealing]] | * [[Insider dealing]] | ||
* [[Layering]] | * [[Layering]] | ||
| Line 17: | Line 17: | ||
* [[Squeeze]] | * [[Squeeze]] | ||
* [[Wash trading]] | * [[Wash trading]] | ||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:Financial_risk_management]] | |||
Latest revision as of 21:39, 13 July 2024
Conduct risk - financial markets
In financial services, front-running is the unethical and likely criminally fraudulent practice of buying securities or making other trades to take advantage of private/confidential knowledge of a future event, for example a large purchase order from a client - an order for currency, shares, commodities, etc.
Distinguishing front-running (unacceptable, probably illegal) from pre-hedging (probably acceptable, even legal) is important for all concerned, but can be very difficult.
