Market Abuse Flashcards
What is Market Abuse?
Involves behaviour in relation to investments that are trading/ applied to trade on the U.K market.
State and Explain the 7 types of behaviour that can amount to market abuse set out by the FSMA
- insider dealing
- improper disclosure
- misuse of info
- manipulating transactions
- manipulating devices
- dissemination of info
- distortion & misleading behaviour
Who is an insider?
How does the FSMA describe info?
Insider = any person who has access to inside info
Info is precise if it indicates circumstances that exist, reasonably expect to come into existence, an event that has or is expected to occur
Info is specific enough if it can enable a conclusion to be drawn about the possible effects of the price of an investment
Penalties for market abuse?
- Market abuse isn’t a criminal offence so conviction wouldn’t result in imprisonment/ jail sentences
- Market abuse is a civil offence so civil penalties would be imposed, i.e unlimited fines
FCA need to prove behaviour was illegal in balance of probabilities, meaning it may secure a conviction for insider dealing under market abuse provisions of FSMA where couldn’t secure one under Criminal Justice Act 1993.
