According to MAR's Commission Delegated Regulation (EU) 2016/522 of 17/Dec/2015, excessive bid-ask spreads is moving the bid-ask spread to and/or maintaining it at artificial levels, by abusing of market power.
Basically, the manipulator can increase the bid-ask spread by trading against any order that improves the BBO (buying against all the orders entered at the best ask and/or selling against all the orders entered against the best bid).
Creating a floor vs. excessive bid-ask spread
Excessive bid-ask spread is basically creating a floor for the bid-ask spread (instead of the price).
Who makes excessive bid-ask spreads?
Market makers (or liquidity providers) – who obviously prefer to mark the market (or provide liquidity) in a high bid-ask spread environment.
Example 1
This way, the manipulator can maintain its market maker (or liquidity provider) offering with a 0.05€ spread.
Example 2
Whenever the bid-ask spread falls to a certain level, the manipulator starts trading against the BBO (buying against the best ask and/or selling against the best bid).
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