Nasdaq may fine Nordic Power Exchange member for price fixing

Fine could be as high as $450,000

Nasdaq Nasdaq

An unidentified member of Nasdaq OMX Group Inc.’s Nordic power derivatives market may be fined for attempting to manipulate prices.

The member breached market manipulation guidelines last April by bidding up the price of the July 2012 contract to achieve a better selling price on the bilateral market, Erik Korsvold, head of market surveillance at the Oslo-based Nordic power derivatives exchange, said today by e-mail.

“Possible sanctions include a written warning, or a violation charge of up to 2.5 million Norwegian kroner ($450,000), with a decision due in four weeks or possibly later,” Korsvold said. The exchange won’t identify the company until a possible penalty is imposed, he said.

The news comes as the Federal Energy Regulatory Commission stepped up its drive to combat electricity market manipulation in the U.S. Nasdaq OMX’s Nordic energy exchange is the world’s largest power derivatives market, with more than 330 trading and clearing members from over 15 countries. The bourse carried out eight investigations into similar manipulation in the three months through December.

The Norwegian probe was triggered by a tip-off from a market participant and the exchange’s internal Market Surveillance filed a recommendation to the Disciplinary Committee last week, the bourse operator said in an e-mailed report on Feb. 15. The board will later decide on possible sanctions, according to market conduct rules on the exchange’s website.

Nasdaq OMX handled 1,663 terawatt-hours of futures and forward contracts last year, according to a monthly report on its website.

Bloomberg News

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