Market Abuse Flashcards
6 Types of Market Abuse
1) Insider Dealing
2) Improper Disclosure of Inside Info
3) Manipulating Transactions
4) Manipulating Devices (Placing and Cancelling Orders)
5) Dissemination ( False Rumours or accounts)
6) Misleading behaviour and distortion
Instruments covered under Insider Dealing (Criminal Offence)
Shares
Warrants
Debt
Options, futures, CFDS
Excluded investments under Insider Dealing (Criminal offence)
Assets no secondary market
Commodities
Insurance Products
Spot and Forward FX
Forward foreign exchange contracts not covered by insider dealing legislation
General Defences against Insider Dealing
- No advantage was expected
- Belief reasonable grounds info had been disclosed widely
- Dealt anyway ( Trading History)
- Did not expect recipient to deal
Special Defences against Insider Dealing
- Stabilisation
- Market Information
- Market makers in ordinary course of business
Penalties Insider dealing
- FCA prosecutes people not companies
- MAX penalty 7 years / and or unlimited fine
Misleading Statements and Impressions Defences
- Believed. statement not false, or misleading
- Acted conformity with price stabilising rules
- Share buy - back rules
Max penalty for Misleading Statements and Impressions
7 Years / Unlimited fine
MAR + Penalties
EU Market Abuse Regulation
Civil in UK
Effect based - don’t have show intent
Scope of MAR
- Traded on EEA regulated market
- Applies to emissions allowance
Statutory Exceptions (Safe Harbours)
- Share buy - back programmes and stabilisation measures
- FCA Rules
- Takeover Code
- Market Soundings
Disclosure and Transparency Rules
- Price sensitive info = Disclosed through regulatory information service , posted on website by end of following day
- PDMR dealing in own company shares disclose to company and FCA within - three days of transaction
- Breach does not criminal offence
