SIX Swiss Exchange can declare a transaction invalid if which condition occurs?

SIX Swiss Exchange can declare a transaction invalid if which condition occurs?

• A. The price of the transaction deviates considerably from the market price.
• B. The price of the transaction exactly matches the market price.
• C. The price of the transaction is within 1% of the market price.
• D. The price of the transaction is dictated by a market maker.

Answer: (C)

On SIX Swiss Exchange, trades are subject to price checks to protect market integrity and avoid recording anomalous or non-genuine prices. The rule in question uses a very tight price window: if the transaction price lies within 1% of the prevailing market price, the exchange may declare the trade invalid. The idea is that a price so close to the current market level can indicate the trade wasn’t genuinely negotiated between two counterparties and might be the result of an error, automated quoting, or other non-credible activity. This narrow threshold helps catch those edge cases where a price appears almost the same as the market but doesn’t reflect a true bilateral agreement, so it’s set up to preserve accurate price formation. As for the other scenarios: a price that deviates noticeably from the market price would generally raise flags as well, but the specific rule highlighted uses the 1% proximity criterion to identify invalid trades. A transaction priced exactly at the market price can occur in normal situations and isn’t automatically invalid, and a price set by a market maker is a standard quoting mechanism rather than a reason for invalidation.

On SIX Swiss Exchange, trades are subject to price checks to protect market integrity and avoid recording anomalous or non-genuine prices. The rule in question uses a very tight price window: if the transaction price lies within 1% of the prevailing market price, the exchange may declare the trade invalid. The idea is that a price so close to the current market level can indicate the trade wasn’t genuinely negotiated between two counterparties and might be the result of an error, automated quoting, or other non-credible activity. This narrow threshold helps catch those edge cases where a price appears almost the same as the market but doesn’t reflect a true bilateral agreement, so it’s set up to preserve accurate price formation.

As for the other scenarios: a price that deviates noticeably from the market price would generally raise flags as well, but the specific rule highlighted uses the 1% proximity criterion to identify invalid trades. A transaction priced exactly at the market price can occur in normal situations and isn’t automatically invalid, and a price set by a market maker is a standard quoting mechanism rather than a reason for invalidation.