Which of the following is a tenet of the integrity of capital markets?

The integrity of capital markets is fundamentally based on the principles of transparency, fairness, and efficiency in the way markets operate. Market manipulation directly undermines these principles because it involves artificially influencing the price or volume of financial instruments for personal gain, thus misleading other market participants and distorting the true market value of the securities involved. This behavior erodes trust in the financial system and can lead to significant consequences for investors and the overall economy.

In contrast, the other options listed do not align with the tenets of market integrity. Preference trading, while it may influence order flows, can distort fair access to market information. Price rounding does not inherently indicate manipulation but can be seen as a practice that may obscure actual values. High-frequency trading, while controversial and subject to regulatory scrutiny, is a legitimate trading strategy that can add liquidity to markets. Overall, the correct answer highlights a practice that fundamentally threatens the trust and efficiency required for well-functioning capital markets.