15 - Market abuse - barely comes up! Flashcards
What does ‘market abuse’ include (most notably)? (3)
- Insider dealing
- Unlawful disclosure of insider information
- Market manipulation
3 separate offences of insider dealing
- Dealing in price-affected securities on basis of inside information
- Encouraging the other person to do the above
- Disclosing inside information
Who can be convicted of insider dealing?
Only natural persons, not legal persons
3 conditions, if 1 of which is met a person is deemed to have dealt in securities:
- Acquire (or agree to acquire) securities, as principal or agent
- Dispose (or agree to dispose) of securities, as principal or agent
- Procure, directly or indirectly, acquisition or disposal of securities by any other persons
A person is deemed to have ‘information as an insider’ if:
- it is, and they know it is inside info
and - they have it, and they know they have it, from an inside source
4 conditions for info to be classified as ‘inside information’
- Relates to specific securities, or particular issuer or issuers of securities
- Specific or precise
- Not public
- If public, would have significant effect on price of securities
When is info deemed to have been made public?(4)
- It has been published
- It is contained in publicly available records
- It can be readily acquired by those dealing in securities
- It is derived from public info
When is info deemed to have come from an ‘inside source’? (2)
- It is obtained through being a director employee or shareholder, or by having access to info by virtue of employment, office or profession
OR - The source of the info is a director, employee or shareholder
3 defences for insider dealing (equivalently relate to encouraging insider dealing offense)
Defendant can show:
- They did not expect to profit from information
- They did not believe the info was insider info
- They would have done what they did regardless
2 defences to disclosing insider info
Defendant can show:
- They did not expect any person to deal in securities following disclosure
- They did not expect the dealing to result in profit being made from the info
3 offences relating to financial statements - FSA 2012
- Misleading statements
- Misleading omissions
- Misleading statements etc, in relation to benchmarks
When is a person acting in a way that can mean they are found guilty of the misleading statement offence (3)
- Making a statement knowing it to be false or misleading
- Making a statement that is false or misleading, being reckless as to whether it is
- Dishonestly concealing material facts
Other than acting in certain way, what else must be the case for person to be found fuilty of misleading statements offence?
- Action induces another person into entering into a contract or relevant agreement (or refraining to do so)
OR - Action induces another person to exercise any rights conferred by a relevant investment (or refraining to do so)
What must be true for a person to be found guilty of misleading omission offence?
- Intent to create false or misleading impression in the market or price of relevant invesment
AND EITHER - Intent to induce another person to deal or exercise rights in relevant investment (or refrain from doing so)
OR
Intent to make a gain, or cause loss, or risk of loss, to another person
Defences to misleading omissions offence (4)
- Believed conduct would not create misleading or false impression
- Acted for the purpose of stabilising price of investments and in conformity with price stabilisation rules
- Acted in conformity with control of information rules
- Acted in conformity with exemption for buy-back programmes and stabilisation found in MAR
