April 8, 2015
One objective of any transaction reporting system is to report all valid trades for purposes of establishing prices of traded securities, without creating opportunities for manipulation. For example, one form of manipulation prohibited by SEC regulations and statutes is creation of the appearance of activity in a stock for purposes of manipulation. Any change to rules which involves suppression of information about some trades should include a prohibition on use of affiliate transactions or
suppression of such transactions for any purpose to game or manipulate the price of securities, or any index involving the security involved. Because the transactions among affiliates could be regarded as "wash trades" it must also be made clear that any reporting of such transactions for any other purpose, as for example as components of some price index involving the affiliate transactions in any security, must include a similar prohibition of use of affiliate transactions, whether suppressed or not, for purposes of influencing the perceived volume or price of such transactions, whether by adding to the reported transactions, or suppressing reporting of the transactions. In addition, any entity engaged in such transactions should be required to report whether such affiliate transactions are being reported for any other purpose related to the securities market, ie compilations of price or volume of such transactions in a given security. Such reporting would provide an additional protection for the role of such affiliate transactions in the overall picture of securities and market activity.