AnonThe anon trade marker was introduced to eliminate the jitney trade problem. Jitney trading was placing a trade trough another firm to mask your house number. Brokerage firms would participate in financings then sell jitneying through another house number so the junior company or other houses did not know it was them selling. If they sold under their own house number, their participation in the next financing was reduced or cut altogether. The jitney made regulation very difficult for the venture exchange. It was also painful for members who had to document and give full disclosure of the jitney on trade confirmations etc. IIROC comes in and audited these transactions for money laundering or manipulative purposes. This was an arduous process involving two firms and confusing trade blotters.
The TSX had town hall meetings which I attended. In the end, they decided to introduce an anon marker any firm can use (number 1). Traders, IAs, Corporate Finance and the house account can use this marker. Firms use this marker to mask house and client trades in hopes of not p"sing off companies who may be raising money in the future. Traders also use it to mask who they are for strategic reasons. Mostly sell side but also the buy side. Iiroc surveillance carefully scrutinizes the use of the anon marker on a live basis. It is a very poor way to manipulate the market because you will get caught. IIROC surveillance physically audits every trade desk annually in addition to the day to day inquiries. A separate IIROC compliance audit occurs at a different time on top of that. The Security Commission selectively pulls information over the year. If you have FINRA US license they audit every two years. If a firm is caught manipulative trading the Ultimate Designated Person (often the CEO), supervisors and compliance are all investigated. Good luck if you have looked the other way. There used to be 40 transactional firms for IIROC to look at, now there are only 10.
Public companies hate the anon marker but never liked the jitney trade either. Even their biggest supporter clients have to sell and anon is the easiest way not to burn your relationship with the Ceo deciding who gets the next financing.
Is anon the boogie man? Depends whether you need it? It is every firm on the street all the time. Is it annoying...absolutely...