MAR 1

The Code of Market Conduct

MAR 1.1

Application and interpretation

MAR 1.1.1

See Notes

handbook-guidance
This chapter (which contains the Code of Market Conduct) applies to all persons seeking guidance on the market abuse regime.

MAR 1.1.2

See Notes

handbook-guidance

This chapter provides assistance in determining whether or not behaviour amounts to market abuse. It also forms part of the UK's implementation of the Market Abuse Directive (including its EU implementing legislation, that is Directive 2003/124/EC, Directive 2003/125/EC, Regulation 2273/2003 and Directive 2004/72/EC). It is therefore likely to be helpful to persons who:

  1. (1) want to avoid engaging in market abuse or to avoid requiring or encouraging another to do so; or
  2. (2) want to determine whether they are required by SUP 15.10 (Reporting suspicious transactions (market abuse)) to report a transaction to the FSA as a suspicious one.

MAR 1.1.3

See Notes

handbook-guidance
The FSA's statement of policy about the imposition and amount of penalties in cases of market abuse (required by section 124 of the Act) is in DEPP 6.

Using MAR 1

MAR 1.1.4

See Notes

handbook-guidance
  1. (1) Assistance in the interpretation of MAR 1 (and the remainder of the Handbook) is given in the Readers' Guide to the Handbook and in GEN 2 (Interpreting the Handbook). This includes an explanation of the status of the types of provision used (see in particular chapter six of the Readers' Guide to the Handbook).
  2. (2) Provisions designated with "C" indicate behaviour which conclusively, for the purposes of the Act, does not amount to market abuse (see section 122(1) of the Act).

MAR 1.1.5

See Notes

handbook-guidance

Part VIII of the Act, and in particular section 118, specifies seven types of behaviour which can amount to market abuse. This chapter considers the general concepts relevant to market abuse, then each type of behaviour in turn and then describes exceptions to market abuse which are of general application. In doing so, it sets out the relevant provisions of the Code of Market Conduct, that is:

  1. (1) descriptions of behaviour that, in the opinion of the FSA, do or do not amount to market abuse (see section 119(2)(a) and (b) and section 122 of the Act);
  2. (2) descriptions of behaviour that are or are not accepted market practices in relation to one or more identified markets (see section 119(2)(d) and (e) and section 122(1) of the Act (subject to the behaviour being for legitimate reasons)); and
  3. (3) factors that, in the opinion of the FSA, are to be taken into account in determining whether or not behaviour amounts to market abuse (see section 119(2)(c) and section 122(2) of the Act).

MAR 1.1.6

See Notes

handbook-guidance

The Code does not exhaustively describe all types of behaviour that may or may not amount to market abuse. In particular, the descriptions of behaviour which, in the opinion of the FSA, amount to market abuse should be read in the light of:

  1. (1) the elements specified by the Act as making up the relevant type of market abuse; and
  2. (2) any relevant descriptions of behaviour which, in the opinion of the FSA, do not amount to market abuse.

MAR 1.1.7

See Notes

handbook-guidance
Likewise, the Code does not exhaustively describe all the factors to be taken into account in determining whether behaviour amounts to market abuse. If factors are described, they are not to be taken as conclusive indications, unless specified as such, and the absence of a factor mentioned does not, of itself, amount to a contrary indication.

MAR 1.1.8

See Notes

handbook-guidance
For the avoidance of doubt, it should be noted that any reference in the Code to "profit" refers also to potential profits, avoidance of loss or potential avoidance of loss.

MAR 1.2

Market Abuse: general

MAR 1.2.1

See Notes

handbook-guidance
Provisions in this section are relevant to more than one of the types of behaviour which may amount to market abuse.

MAR 1.2.2

See Notes

handbook-uk-text

Table: section 118(1) of the Act

MAR 1.2.3

See Notes

handbook-guidance
Section 118(1)(a) of the Act does not require the person engaging in the behaviour in question to have intended to commit market abuse.

MAR 1.2.4

See Notes

handbook-guidance
Statements in this chapter to the effect that behaviour will amount to market abuse assume that the test in section 118(1)(a) of the Act has also been met.

Prescribed markets and qualifying investments: "in relation to": factors to be taken into account

MAR 1.2.5

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not behaviour prior to a request for admission to trading or the admission to or the commencement of trading satisfies section 118(1)(a) of the Act, and are indications that it does:
  1. (1) if it is in relation to qualifying investments in respect of which a request for admission to trading on a prescribed market is subsequently made; and
  2. (2) if it continues to have an effect once an application has been made for the qualifying investment to be admitted for trading, or it has been admitted to trading on a prescribed market, respectively.

MAR 1.2.6

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not refraining from action amounts to behaviour which satisfies section 118(1)(a) of the Act and are indications that it does:
  1. (1) if the person concerned has failed to discharge a legal or regulatory obligation (for example to make a particular disclosure) by refraining from acting; or
  2. (2) if the person concerned has created a reasonable expectation of him acting in a particular manner, as a result of his representations (by word or conduct), in circumstances which give rise to a duty or obligation to inform those to whom he made the representations that they have ceased to be correct, and he has not done so.

Insiders: factors to be taken into account

MAR 1.2.7

See Notes

handbook-uk-text

Table: section 118B of the Act

MAR 1.2.8

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a person could reasonably be expected to know that information in his possession is inside information and therefore whether he is an insider under section 118B(e) of the Act, and indicate that the person is an insider:
  1. (1) if a normal and reasonable person in the position of the person who has inside information would know or should have known that the person from whom he received it is an insider; and
  2. (2) if a normal and reasonable person in the position of the person who has inside information would know or should have known that it is inside information.

MAR 1.2.9

See Notes

handbook-guidance
For the purposes of the other categories of insider specified by section 118B(a) to (d), the person concerned does not need to know that the information concerned is inside information.

Inside information: factors to be taken into account

MAR 1.2.10

See Notes

handbook-uk-text

Table: section 118C(2) and (3) of the Act

MAR 1.2.11

See Notes

handbook-guidance
The phrase "precise nature" is defined in section 118C(5) of the Act. This phrase is also relevant to section 118C(4) of the Act.

MAR 1.2.12

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not information is generally available, and are indications that it is (and therefore not inside information):
  1. (1) whether the information has been disclosed to a prescribed market through a regulatory information service or RIS or otherwise in accordance with the rules of that market;
  2. (2) whether the information is contained in records which are open to inspection by the public;
  3. (3) whether the information is otherwise generally available, including through the Internet, or some other publication (including if it is only available on payment of a fee), or is derived from information which has been made public;
  4. (4) whether the information can be obtained by observation by members of the public without infringing rights or obligations of privacy, property or confidentiality; and
  5. (5) the extent to which the information can be obtained by analysing or developing other information which is generally available. [Note: Recital 31 Market Abuse Directive]

MAR 1.2.13

See Notes

handbook-evidential-provisions
  1. (1) In relation to the factors in MAR 1.2.12E it is not relevant that the information is only generally available outside the UK.
  2. (2) In relation to the factors in MAR 1.2.12E (1), (3), (4) and (5) it is not relevant that the observation or analysis is only achievable by a person with above average financial resources, expertise or competence.

MAR 1.2.14

See Notes

handbook-guidance
For example, if a passenger on a train passing a burning factory calls his broker and tells him to sell shares in the factory's owner, the passenger will be acting on information which is generally available, since it is information which has been obtained by legitimate means through observation of a public event.

MAR 1.2.15

See Notes

handbook-uk-text

Table: section 118C(4) of the Act

MAR 1.2.16

See Notes

handbook-evidential-provisions
In the opinion of the FSA, a factor which indicates that there is a pending order for a client is, if a person is approached by another in relation to a transaction, and:
  1. (1) the transaction is not immediately executed on an arm's length basis in response to a price quoted by that person; and
  2. (2) the person concerned has taken on a legal or regulatory obligation relating to the manner or timing of the execution of the transaction.

Inside information: commodity derivatives

MAR 1.2.17

See Notes

handbook-guidance
The Act (and the Market Abuse Directive) recognise that there are differences in the nature of information which is important to commodity derivatives markets and that which is important to other markets. In particular, inside information is limited by reference to what the market participants expect to receive information about.

MAR 1.2.18

See Notes

handbook-uk-text

Table: section 118C(3) of the Act

MAR 1.2.19

See Notes

handbook-uk-text

Table: section 118C(7) of the Act

The regular user

MAR 1.2.20

See Notes

handbook-guidance

In section 118 of the Act, the regular user decides:

  1. (1) whether information that is not generally available would or would be likely to be relevant when deciding the terms on which transactions in qualifying investments or related investments should be effected (section 118(4)(a) of the Act); and
  2. (2) whether behaviour:
    1. (a) based on information meeting the criteria in section 118(4)(a) is below the expected standard (section 118(4)(b)); or
    2. (b) creates or is likely to create a false or misleading impression or distorts the market or (section 118(8)); or
    3. (c) which creates or is likely to create a false or misleading impression or distorts the market is below the expected standard (section 118(8)).

MAR 1.2.21

See Notes

handbook-guidance
The regular user is a hypothetical reasonable person who regularly deals on the market and in the investments of the kind in question. The presence of the regular user imports an objective element into the elements listed in MAR 1.2.15 UK while retaining some subjective features of the markets for the investments in question.

Requiring or encouraging

MAR 1.2.22

See Notes

handbook-uk-text

Table: section 123(1)(b) of the Act

MAR 1.2.23

See Notes

handbook-guidance

The following are examples of behaviour that might fall within the scope of section 123(1)(b):

  1. (1) a director of a company, while in possession of inside information, instructs an employee of that company to deal in qualifying investments or related investments in respect of which the information is inside information;
  2. (2) a person recommends or advises a friend to engage in behaviour which, if he himself engaged in it, would amount to market abuse.

MAR 1.3

Market abuse (insider dealing)

MAR 1.3.1

See Notes

handbook-uk-text

Table: section 118(2) of the Act

Descriptions of behaviour that amount to market abuse (insider dealing)

MAR 1.3.2

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA, market abuse (insider dealing):
  1. (1) dealing on the basis of inside information which is not trading information;
  2. (2) front running/pre-positioning - that is, a transaction for a person's own benefit, on the basis of and ahead of an order which he is to carry out with or for another (in respect of which information concerning the order is inside information), which takes advantage of the anticipated impact of the order on the market price;
  3. (3) in the context of a takeover, an offeror or potential offeror entering into a transaction in a qualifying investment, on the basis of inside information concerning the proposed bid, that provides merely an economic exposure to movements in the price of the target company's shares (for example, a spread bet on the target company's share price); and
  4. (4) in the context of a takeover, a person who acts for the offeror or potential offeror dealing for his own benefit in a qualifying investment or related investments on the basis of information concerning the proposed bid which is inside information.

Factors to be taken into account: "on the basis of"

MAR 1.3.3

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a person's behaviour is "on the basis of" inside information, and are each indications that it is not:
  1. (1) if the decision to deal or attempt to deal was made before the person possessed the relevant inside information; or
  2. (2) if the person concerned is dealing to satisfy a legal or regulatory obligation which came into being before he possessed the relevant inside information; or
  3. (3) if a person is an organisation, if none of the individuals in possession of the inside information:
    1. (a) had any involvement in the decision to deal; or
    2. (b) behaved in such a way as to influence, directly or indirectly, the decision to engage in the dealing; or
    3. (c) had any contact with those who were involved in the decision to engage in the dealing whereby the information could have been transmitted.

MAR 1.3.4

See Notes

handbook-evidential-provisions
In the opinion of the FSA, if the inside information is the reason for, or a material influence on, the decision to deal or attempt to deal, that indicates that the person's behaviour is "on the basis of" inside information.

MAR 1.3.5

See Notes

handbook-evidential-provisions
In the opinion of the FSA, if the inside information is held behind an effective Chinese wall, or similarly effective arrangements, from the individuals who are involved in or who influence the decision to deal, that indicates that the decision to deal by an organisation is not "on the basis of" inside information.

Descriptions of behaviour that do not amount to market abuse (insider dealing) and relevant factors: legitimate business of market makers etc:

MAR 1.3.6

See Notes

handbook-conduct
A person will form an intention to buy or sell a qualifying investment or a related investment before doing so. His carrying out of his own intention is not in itself market abuse (insider dealing). [Note: Recital 30 Market Abuse Directive]

MAR 1.3.7

See Notes

handbook-conduct
For market makers and persons that may lawfully deal in qualifying investments or related investments on their own account, pursuing their legitimate business of such dealing (including entering into an agreement for the underwriting of an issue of financial instruments) will not in itself amount to market abuse (insider dealing). [Note: Recital 18 Market Abuse Directive]

MAR 1.3.8

See Notes

handbook-guidance
MAR 1.3.7 C applies even if the person concerned in fact possesses trading information which is inside information.

MAR 1.3.9

See Notes

handbook-evidential-provisions
In the opinion of the FSA, if the inside information is not limited to trading information, (except in relation to an agreement for the underwriting of an issue of financial instruments) that indicates that the behaviour is not in pursuit of legitimate business.

MAR 1.3.10

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a person's behaviour is in pursuit of legitimate business, and are indications that it is:
  1. (1) the extent to which the relevant trading by the person is carried out in order to hedge a risk, and in particular the extent to which it neutralises and responds to a risk arising out of the person's legitimate business; or
  2. (2) whether, in the case of a transaction on the basis of inside information about a client's transaction which has been executed, the reason for it being inside information is that information about the transaction is not, or is not yet, required to be published under any relevant regulatory or exchange obligations; or
  3. (3) whether, if the relevant trading by that person is connected with a transaction entered into or to be entered into with a client (including a potential client), the trading either has no impact on the price or there has been adequate disclosure to that client that trading will take place and he has not objected to it; or
  4. (4) the extent to which the person's behaviour was reasonable by the proper standards of conduct of the market concerned, taking into account any relevant regulatory or legal obligations and whether the transaction is executed in a way which takes into account the need for the market as a whole to operate fairly and efficiently.

MAR 1.3.11

See Notes

handbook-evidential-provisions
In the opinion of the FSA, if the person acted in contravention of a relevant legal, regulatory or exchange obligation, that is a factor to be taken into account in determining whether or not a person's behaviour is in pursuit of legitimate business, and is an indication that it is not.

Descriptions of behaviour that do not amount to market abuse (insider dealing) and relevant factors: execution of client orders

MAR 1.3.12

See Notes

handbook-conduct
The dutiful carrying out of, or arranging for the dutiful carrying out of, an order on behalf of another (including as portfolio manager) will not in itself amount to market abuse (insider dealing) by the person carrying out that order. [Note: Recital 18 Market Abuse Directive]

MAR 1.3.13

See Notes

handbook-guidance
MAR 1.3.12 C applies whether or not the person carrying out the order or the person for whom he is acting in fact possesses inside information. Also, a person that carries out an order on behalf of another will not, merely as a result of that action, be considered to have any inside information held by that other person.

MAR 1.3.14

See Notes

handbook-evidential-provisions
In the opinion of the FSA, if the inside information is not limited to trading information, that indicates that the behaviour is not dutiful carrying out of an order on behalf of a client.

MAR 1.3.15

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a person's behaviour is dutiful execution of an order on behalf of another, and are indications that it is:
  1. (1) whether the person has complied with the applicable provisions of COBS , or their equivalents in the relevant jurisdiction; or
  2. (2) whether the person has agreed with its client it will act in a particular way when carrying out, or arranging the carrying out of, the order; or
  3. (3) whether the person's behaviour was with a view to facilitating or ensuring the effective carrying out of the order; or
  4. (4) the extent to which the person's behaviour was reasonable by the proper standards of conduct of the market concerned and (if relevant) proportional to the risk undertaken by him; or
  5. (5) whether, if the relevant trading by that person is connected with a transaction entered into or to be entered into with a client (including a potential client), the trading either has no impact on the price or there has been adequate disclosure to that client that trading will take place and he has not objected to it.

MAR 1.3.16

See Notes

handbook-guidance
Some steps which a person takes as a result of carrying out a client transaction may be within the scope of MAR 1.3.6 C to MAR 1.3.11 E rather than being part of dutiful execution.

Descriptions of behaviour that do not amount to market abuse (insider dealing) and relevant factors: takeover and merger activity

MAR 1.3.17

See Notes

handbook-conduct
Behaviour, based on inside information relating to another company, in the context of a public takeover bid or merger for the purpose of gaining control of that company or proposing a merger with that company, does not of itself amount to market abuse (insider dealing) [Note: see Recital 29 Market Abuse Directive], including:
  1. (1) seeking from holders of securities, issued by the target, irrevocable undertakings or expressions of support to accept an offer to acquire those securities (or not to accept such an offer);
  2. (2) making arrangements in connection with an issue of securities that are to be offered as consideration for the takeover or merger offer or to be issued in order to fund the takeover or merger offer, including making arrangements for the underwriting or placing of those securities and any associated hedging arrangements by underwriters or places which are proportionate to the risks assumed; and
  3. (3) making arrangements to offer cash as consideration for the takeover or merger offer as an alternative to securities consideration.

MAR 1.3.18

See Notes

handbook-guidance

There are two categories of inside information relevant to MAR 1.3.17 C:

  1. (1) information that an offeror or potential offeror is going to make, or is considering making, an offer for the target;
  2. (2) information that an offeror or potential offeror may obtain through due diligence.

MAR 1.3.19

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a person's behaviour is for the purpose of him gaining control of the target company or him proposing a merger with that company, and are indications that it is:
  1. (1) whether the transactions concerned are in the target company's shares; or
  2. (2) whether the transactions concerned are for the sole purpose of gaining that control or effecting that merger.

Examples of market abuse (insider dealing)

MAR 1.3.20

See Notes

handbook-guidance

The following examples of market abuse (insider dealing) concern the definition of inside information relating to financial instruments other than commodity derivatives.

  1. (1) X, a director at B PLC has lunch with a friend, Y. X tells Y that his company has received a takeover offer that is at a premium to the current share price at which it is trading. Y enters into a spread bet priced or valued by reference to the share price of B PLC based on his expectation that the price in B PLC will increase once the take over offer is announced.
  2. (2) An employee at B PLC obtains the information that B PLC has just lost a significant contract with its main customer. Before the information is announced over the regulatory information service the employee, whilst being under no obligation to do so, sells his shares in B PLC based on the information about the loss of the contract.

MAR 1.3.21

See Notes

handbook-guidance
The following example of market abuse (insider dealing) concerns the definition of inside information relating to commodity derivatives.
Before the official publication of LME stock levels, a metals trader learns (from an insider) that there has been a significant decrease in the level of LME aluminium stocks. This information is routinely made available to users of that prescribed market. The trader buys a substantial number of futures in that metal on the LME, based upon his knowledge of the significant decrease in aluminium stock levels.

MAR 1.3.22

See Notes

handbook-guidance
The following example of market abuse (insider dealing) concerns the definition of inside information relating to pending client orders.
A dealer on the trading desk of a firm dealing in oil derivatives accepts a very large order from a client to acquire a long position in oil futures deliverable in a particular month. Before executing the order, the dealer trades for the firm and on his personal account by taking a long position in those oil futures, based on the expectation that he will be able to sell them at profit due to the significant price increase that will result from the execution of his client's order. Both trades will be market abuse (insider dealing).

MAR 1.3.23

See Notes

handbook-guidance

The following connected examples of market abuse (insider dealing) concerns the differences in the definition of inside information for commodity derivatives and for other financial instruments.

  1. (1) A person deals, on a prescribed market, in the equities of XYZ plc, a commodity producer, based on inside information concerning that company.
  2. (2) A person deals, in a commodity futures contract traded on a prescribed market, based on the same information, provided that the information is required to be disclosed under the rules of the relevant commodity futures market.

MAR 1.4

Market abuse (improper disclosure)

MAR 1.4.1

See Notes

handbook-uk-text

Table: section 118(3) of the Act

Descriptions of behaviour that amount to market abuse (improper disclosure)

MAR 1.4.2

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA, market abuse (improper disclosure):
  1. (1) disclosure of inside information by the director of an issuer to another in a social context; and
  2. (2) selective briefing of analysts by directors of issuers or others who are persons discharging managerial responsibilities.

Descriptions of behaviour that does not amount to market abuse (improper disclosure)

MAR 1.4.3

See Notes

handbook-conduct
Disclosure of inside information will not amount to market abuse (improper disclosure), if it is made:
  1. (1) to a government department, the Bank of England, the Competition Commission, the Takeover Panel or any other regulatory body or authority for the purposes of fulfilling a legal or regulatory obligation; or
  2. (2) otherwise to such a body in connection with the performance of the functions of that body.

MAR 1.4.4

See Notes

handbook-conduct
Disclosure of inside information which is required or permitted by Part 6 rules (or any similar regulatory obligation) will not amount to market abuse (improper disclosure).

Factors to be taken into account in determining whether or not behaviour amounts to market abuse (improper disclosure)

MAR 1.4.5

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not the disclosure was made by a person in the proper course of the exercise of his employment, profession or duties, and are indications that it was:
  1. (1) whether the disclosure is permitted by the rules of a prescribed market, of the FSA or the Takeover Code; or
  2. (2) whether the disclosure is accompanied by the imposition of confidentiality requirements upon the person to whom the disclosure is made and is:
    1. (a) reasonable and is to enable a person to perform the proper functions of his employment, profession or duties; or
    2. (b) reasonable and is (for example, to a professional adviser) for the purposes of facilitating or seeking or giving advice about a transaction or takeover bid; or
    3. (c) reasonable and is for the purpose of facilitating any commercial, financial or investment transaction (including prospective underwriters or placees of securities); or
    4. (d) reasonable and is for the purpose of obtaining a commitment or expression of support in relation to an offer which is subject to the Takeover Code; or
    5. (e) in fulfilment of a legal obligation, including to employee representatives or trade unions acting on their behalf; or
  3. (3) whether:
    1. (a) the information disclosed is trading information;
    2. (b) the disclosure is made by a person ("A") only to the extent necessary, and solely in order, to offer to dispose of the investment to, or acquire the investment from, the person receiving the information; and
    3. (c) it is reasonable for A to make the disclosure to enable him to perform the proper functions of his employment, profession or duties.

MAR 1.4.5A

See Notes

handbook-guidance
MAR 1.4.5 E (3) is intended only to apply to an actual offer of the investment. It is not intended to apply to a disclosure of trading information to gauge potential interest in the investments to be offered or to help establish the likely price that will be obtained.

Examples of market abuse (improper disclosure)

MAR 1.4.6

See Notes

handbook-guidance
The following is an exampleof market abuse (improper disclosure):
X, a director at B PLC has lunch with a friend, Y, who has no connection with B PLC or its advisers. X tells Y that his company has received a takeover offer that is at a premium to the current share price at which it is trading.

MAR 1.4.7

See Notes

handbook-guidance
The following is an example of encouraging another to engage in market abuse (improper disclosure):
X, an analyst employed by an investment bank, telephones the finance director at B PLC and presses for details of the profit and loss account from the latest unpublished management accounts of B PLC.

MAR 1.5

Market abuse (misuse of information)

MAR 1.5.1

See Notes

handbook-uk-text

Table: section 118(4) of the Act:

Descriptions of behaviour that amount to market abuse (misuse of information)

MAR 1.5.2

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA, market abuse (misuse of information):
  1. (1) dealing or arranging deals in qualifying investments based on relevant information, which is not generally available and relates to matters which a regular user would reasonably expect to be disclosed to users of the particular prescribed market, but which does not amount to market abuse (insider dealing) (whether because the dealing relates to a qualifying investment to which section 118(2) does not apply or because the relevant information is not inside information); and
  2. (2) a director giving relevant information, which is not generally available and relates to matters which a regular user would reasonably expect to be disclosed to users of the particular prescribed market, to another otherwise than in the proper course of the exercise of his employment or duties, in a way which does not amount to market abuse (improper disclosure) (whether because the relevant information is not inside information or for some other reason).

MAR 1.5.3

See Notes

handbook-guidance

The following behaviours are, in the opinion of the FSA, capable of amounting to market abuse (misuse of information):

  1. (1) dealing in a qualifying investment based on relevant information, which is not generally available and is not inside information;
  2. (2) behaviour, other than dealing in a qualifying investment or a related investment, that is based on relevant information which is not generally available and is not inside information; and
  3. (3) entering into a transaction, which is not a qualifying investment or a related investment, based on relevant information which is not generally available and is not inside information.

Factors to be taken into account: "generally available"

MAR 1.5.4

See Notes

handbook-evidential-provisions
The factors taken into account in deciding whether or not information is generally available for the purposes of the definition of inside information (see MAR 1.2.12 E - MAR 1.2.13 E) will also be relevant when considering whether or not behaviour amounts to market abuse (misuse of information).

Factors to be taken into account: "based on"

MAR 1.5.5

See Notes

handbook-evidential-provisions
The factors taken into account in deciding whether or not a person's behaviour is "on the basis of" inside information (see MAR 1.3.3 E - MAR 1.3.5 E) will also be relevant when considering whether or not behaviour is "based on" relevant information which is not generally available to those using the market.

Factors to be taken into account: "relevant information"

MAR 1.5.6

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a regular user would regard information as relevant information, and are indications that he would:
  1. (1) the extent to which the information is reliable, including how near the person providing the information is, or appears to be, to the original source of that information and the reliability of that source; or
  2. (2) if the information differs from information which is generally available and can therefore be said to be new or fresh information; or
  3. (3) in the case of information relating to possible future developments which are not currently required to be disclosed but which, if they occur, will lead to a disclosure or announcement being made whether the information provides, with reasonable certainty, grounds to conclude that the possible future developments will, in fact, occur; or
  4. (4) if there is no other material information which is already generally available to inform users of the market.

Factors to be taken into account: standards of behaviour

MAR 1.5.7

See Notes

handbook-evidential-provisions
In the opinion of the FSA , the following factors are to be taken into account when considering whether a regular user would reasonably expect the relevant information to be disclosed to users of the particular prescribed market, or to be announced, and accordingly whether behaviour is likely to be regarded by a regular user as failing to meet the expected standard and are indications that he would:
  1. (1) if the relevant information has to be disclosed in accordance with any legal or regulatory requirement, such as:
    1. (a) information which is required to be disseminated under the Takeover Code (or itsequivalent in the relevant jurisdiction) on, or in relation to, qualifying investments; or
    2. (b) information which is required to be disseminated under the Part 6 rules (or their equivalents in the relevant jurisdiction); or
    3. (c) information required to be disclosed by an issuer under the laws, rules or regulations applying to the prescribed market on which its issued qualifying investments are traded or admitted to trading; or
  2. (2) if the relevant information is routinely the subject of a public announcement although not subject to any formal disclosure requirement, such as:
    1. (a) information which is to be the subject of official announcement by governments, central monetary or fiscal authorities or a regulatory body (financial or otherwise, including exchanges); or
    2. (b) changes to published credit ratings of issuers of qualifying investments; or
    3. (c) changes to the constituents of a securities index, where the securities are qualifying investments; or
  3. (3) if behaviour is based on information relating to possible future developments, if it is reasonable to believe that the information in question will subsequently become of a type within (1) or (2).

Descriptions of behaviour that does not amount to market abuse (misuse of information)

MAR 1.5.8

See Notes

handbook-guidance

MAR 1.5.9

See Notes

handbook-conduct
Behaviour falling within the descriptions of behaviour that do not amount to market abuse (insider dealing) (MAR 1.3.6 C, MAR 1.3.7 C, MAR 1.3.12 C and MAR 1.3.17 C), or that would fall within those descriptions, if the references in those descriptions to inside information included a reference to relevant information, also do not amount to market abuse (misuse of information).

Examples of market abuse (misuse of information)

MAR 1.5.10

See Notes

handbook-evidential-provisions
The following behaviour may amount to market abuse (misuse of information):
  1. (1) X, a director at B PLC, has lunch with a friend, Y. X tells Y that his company has received a takeover offer. Y places a fixed odds bet with a bookmaker that B PLC will be the subject of a bid within a week, based on his expectation that the take over offer will be announced over the next few days.
  2. (2) Informal, non-contractual icing of qualifying investments by the manager of a proposed issue of convertible or exchangeable bonds, which are to be the subject of a public marketing effort, with a view to subsequent borrowing by it of those qualifying investments based on relevant information about the forthcoming issue:
    1. (a) which is not generally available; and
    2. (b) which a regular user would reasonably expect to be disclosed to users of the relevant prescribed market;
  3. where this has the effect of withdrawing those qualifying investments from the lending market in order to lend it to the issue manager in such a way that other market participants are disadvantaged.
  4. (3) An employee of B PLC is aware of contractual negotiations between B PLC and a customer. Transactions with that customer have generated over 10% of B PLC's turnover in each of the last five financial years. The employee knows that the customer has threatened to take its business elsewhere, and that the negotiations, while ongoing, are not proceeding well. The employee, whilst being under no obligation to do so, sells his shares in B PLC based on his assessment that it is reasonably likely that the customer will take his business elsewhere.

MAR 1.6

Market abuse (manipulating transactions)

MAR 1.6.1

See Notes

handbook-uk-text

Table: section 118(5) of the Act

Descriptions of behaviour that amount to market abuse (manipulating transactions): false or misleading impressions

MAR 1.6.2

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA, market abuse (manipulating transactions) of a type involving false or misleading impressions:
  1. (1) buying or selling qualifying investments at the close of the market with the effect of misleading investors who act on the basis of closing prices, other than for legitimate reasons; [Note: Article 1.2(c) Market Abuse Directive]
  2. (2) wash trades - that is, a sale or purchase of a qualifying investment where there is no change in beneficial interest or market risk, or where the transfer of beneficial interest or market risk is only between parties acting in concert or collusion, other than for legitimate reasons;
  3. (3) painting the tape - that is, entering into a series of transactions that are shown on a public display for the purpose of giving the impression of activity or price movement in a qualifying investment; and
  4. (4) entering orders into an electronic trading system, at prices which are higher than the previous bid or lower than the previous offer, and withdrawing them before they are executed, in order to give a misleading impression that there is demand for or supply of the qualifying investment at that price.

MAR 1.6.3

See Notes

handbook-guidance
For the avoidance of doubt a stock lending/borrowing or repo/reverse repo transaction, or another transaction involving the provision of collateral, do not constitute a wash trade under MAR 1.6.2E (2).

Descriptions of behaviour that amount to market abuse (manipulating transactions): price positioning

MAR 1.6.4

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA, market abuse (manipulating transactions) involving securing the price of a qualifying investment:
  1. (1) transactions or orders to trade by a person, or persons acting in collusion, that secure a dominant position over the supply of or demand for a qualifying investment and which have the effect of fixing, directly or indirectly, purchase or sale prices or creating other unfair trading conditions, other than for legitimate reasons; [Note: Article 1.2(c) Market Abuse Directive]
  2. (2) transactions where both buy and sell orders are entered at, or nearly at, the same time, with the same price and quantity by the same party, or different but colluding parties, other than for legitimate reasons, unless the transactions are legitimate trades carried out in accordance with the rules of the relevant trading platform (such as crossing trades);
  3. (3) entering small orders into an electronic trading system, at prices which are higher than the previous bid or lower than the previous offer, in order to move the price of the qualifying investment, other than for legitimate reasons;
  4. (4) an abusive squeeze - that is, a situation in which a person:
    1. (a) has a significant influence over the supply of, or demand for, or delivery mechanisms for a qualifying investment or related investment or the underlying product of a derivative contract;
    2. (b) has a position (directly or indirectly) in an investment under which quantities of the qualifying investment, related investment, or product in question are deliverable; and
    3. (c) engages in behaviour with the purpose of positioning at a distorted level the price at which others have to deliver, take delivery or defer delivery to satisfy their obligations in relation to a qualifying investment (the purpose need not be the sole purpose of entering into the transaction or transactions, but must be an actuating purpose);
  5. (5) parties, who have been allocated qualifying investments in a primary offering, colluding to purchase further tranches of those qualifying investments when trading begins, in order to force the price of the qualifying investments to an artificial level and generate interest from other investors, and then sell the qualifying investments;
  6. (6) transactions or orders to trade employed so as to create obstacles to the price falling below a certain level, in order to avoid negative consequences for the issuer, for example a downgrading of its credit rating; and
  7. (7) trading on one market or trading platform with a view to improperly influencing the price of the same or a related qualifying investment that is traded on another prescribed market.

Factors to be taken into account: "legitimate reasons"

MAR 1.6.5

See Notes

handbook-evidential-provisions
In the opinion of the FSA the following factors are to be taken into account when considering whether behaviour is for "legitimate reasons", and are indications that it is not:
  1. (1) if the person has an actuating purpose behind the transaction to induce others to trade in, or to position or move the price of, a qualifying investment;
  2. (2) if the person has another, illegitimate, reason behind the transactions or order to trade; [Note: Recital 20 Market Abuse Directive]
  3. (3) if the transaction was executed in a particular way with the purpose of creating a false or misleading impression.

MAR 1.6.6

See Notes

handbook-evidential-provisions
In the opinion of the FSA the following factors are to be taken into account when considering whether behaviour is for "legitimate reasons", and are indications that it is:
  1. (1) if the transaction is pursuant to a prior legal or regulatory obligation owed to a third party;
  2. (2) if the transaction is executed in a way which takes into account the need for the market as a whole to operate fairly and efficiently;
  3. (3) the extent to which the transaction generally opens a new position, so creating an exposure to market risk, rather than closes out a position and so removes market risk; and
  4. (4) if the transaction complied with the rules of the relevant prescribed markets about how transactions are to be executed in a proper way (for example, rules on reporting and executing cross-transactions).

MAR 1.6.7

See Notes

handbook-guidance
It is unlikely that the behaviour of market users when trading at times and in sizes most beneficial to them (whether for the purpose of long term investment objectives, risk management or short term speculation) and seeking the maximum profit from their dealings will of itself amount to distortion. Such behaviour, generally speaking, improves the liquidity and efficiency of markets.

MAR 1.6.8

See Notes

handbook-guidance
It is unlikely that prices in the market which are trading outside their normal range will necessarily be indicative that someone has engaged in behaviour with the purpose of positioning prices at a distorted level. High or low prices relative to a trading range can be the result of the proper interplay of supply and demand.

Factors to be taken into account: behaviour giving a false or misleading impression

MAR 1.6.9

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a person's behaviour amounts to market abuse (manipulating transactions): [Note: Article 4 2003/124/EC]
  1. (1) the extent to which orders to trade given or transactions undertaken represent a significant proportion of the daily volume of transactions in the relevant qualifying investment on the regulated market concerned, in particular when these activities lead to a significant change in the price of the qualifying investment;
  2. (2) the extent to which orders to trade given or transactions undertaken by persons with a significant buying or selling position in a qualifying investment lead to significant changes in the price of the qualifying investment or related derivative or underlying asset admitted to trading on a regulated market;
  3. (3) whether transactions undertaken lead to no change in beneficial ownership of a qualifying investment admitted to trading on a regulated market;
  4. (4) the extent to which orders to trade given or transactions undertaken include position reversals in a short period and represent a significant proportion of the daily volume of transactions in the relevant qualifying investment on the regulated market concerned, and might be associated with significant changes in the price of a qualifying investment admitted to trading on a regulated market;
  5. (5) the extent to which orders to trade given or transactions undertaken are concentrated within a short time span in the trading session and lead to a price change which is subsequently reversed;
  6. (6) the extent to which orders to trade given change the representation of the best bid or offer prices in a financial instrument admitted to trading on a regulated market, or more generally the representation of the order book available to market participants, and are removed before they are executed; and
  7. (7) the extent to which orders to trade are given or transactions are undertaken at or around a specific time when reference prices, settlement prices and valuations are calculated and lead to price changes which have an effect on such prices and valuations.

Factors to be taken into account: behaviour securing an abnormal or artificial price level

MAR 1.6.10

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not a person's behaviour amounts to market abuse (manipulating transactions):
  1. (1) the extent to which the person had a direct or indirect interest in the price or value of the qualifying investment or related investment;
  2. (2) the extent to which price, rate or option volatility movements, and the volatility of these factors for the investment in question, are outside their normal intra-day, daily, weekly or monthly range; and
  3. (3) whether a person has successively and consistently increased or decreased his bid, offer or the price he has paid for a qualifying investment or related investment.

Factors to be taken into account: abusive squeezes

MAR 1.6.11

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account when determining whether a person has engaged in an abusive squeeze:
  1. (1) the extent to which a person is willing to relax his control or other influence in order to help maintain an orderly market, and the price at which he is willing to do so; for example, behaviour is less likely to amount to an abusive squeeze if a person is willing to lend the investment in question;
  2. (2) the extent to which the person's activity causes, or risks causing, settlement default by other market users on a multilateral basis and not just a bilateral basis. The more widespread the risk of multilateral settlement default, the more likely that an abusive squeeze has been effected;
  3. (3) the extent to which prices under the delivery mechanisms of the market diverge from the prices for delivery of the investment or its equivalent outside those mechanisms. The greater the divergence beyond that to be reasonably expected, the more likely that an abusive squeeze has been effected; and
  4. (4) the extent to which the spot or immediate market compared to the forward market is unusually expensive or inexpensive or the extent to which borrowing rates are unusually expensive or inexpensive.

MAR 1.6.12

See Notes

handbook-guidance
Squeezes occur relatively frequently when the proper interaction of supply and demand leads to market tightness, but this is not of itself abusive. In addition, having a significant influence over the supply of, or demand for, or delivery mechanisms for an investment, for example, through ownership, borrowing or reserving the investment in question, is not of itself abusive.

MAR 1.6.13

See Notes

handbook-guidance
The effects of an abusive squeeze are likely to be influenced by the extent to which other market users have failed to protect their own interests or fulfil their obligations in a manner consistent with the standards of behaviour to be expected of them in that market. Market users can be expected to settle their obligations and not to put themselves in a position where, to do so, they have to rely on holders of long positions lending when they may not be inclined to do so and may be under no obligation to do so.

Examples of market abuse (manipulating transactions)

MAR 1.6.15

See Notes

handbook-evidential-provisions
The following are examples of behaviour that may amount to market abuse (manipulating transactions):
  1. (1) a trader simultaneously buys and sells the same qualifying investment (that is, trades with himself) to give the appearance of a legitimate transfer of title or risk (or both) at a price outside the normal trading range for the qualifying investment. The price of the qualifying investment is relevant to the calculation of the settlement value of an option. He does this while holding a position in the option. His purpose is to position the price of the qualifying investment at a false, misleading, abnormal or artificial level, making him a profit or avoiding a loss from the option;
  2. (2) a trader buys a large volume of commodity futures, which are qualifying investments, (whose price will be relevant to the calculation of the settlement value of a derivatives position he holds) just before the close of trading. His purpose is to position the price of the commodity futures at a false, misleading, abnormal or artificial level so as to make a profit from his derivatives position;
  3. (3) a trader holds a short position that will show a profit if a particular qualifying investment, which is currently a component of an index, falls out of that index. The question of whether the qualifying investment will fall out of the index depends on the closing price of the qualifying investment. He places a large sell order in this qualifying investment just before the close of trading. His purpose is to position the price of the qualifying investment at a false, misleading, abnormal or artificial level so that the qualifying investment will drop out of the index so as to make a profit; and
  4. (4) a fund manager's quarterly performance will improve if the valuation of his portfolio at the end of the quarter in question is higher rather than lower. He places a large order to buy relatively illiquid shares, which are also components of his portfolio, to be executed at or just before the close. His purpose is to position the price of the shares at a false, misleading, abnormal or artificial level.

MAR 1.6.16

See Notes

handbook-evidential-provisions
The following is an example of an abusive squeeze:

  1. A trader with a long position in bond futures buys or borrows a large amount of the cheapest to deliver bonds and either refuses to re-lend these bonds or will only lend them to parties he believes will not re-lend to the market. His purpose is to position the price at which those with short positions have to deliver to satisfy their obligations at a materially higher level, making him a profit from his original position.

MAR 1.7

Market abuse (manipulating devices)

MAR 1.7.1

See Notes

handbook-uk-text

Table: section 118(6) of the Act

Descriptions of behaviour that amount to market abuse (manipulating devices)

MAR 1.7.2

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA, market abuse (manipulating devices):
  1. (1) taking advantage of occasional or regular access to the traditional or electronic media by voicing an opinion about a qualifying investment (or indirectly about its issuer) while having previously taken positions on that qualifying investment and profiting subsequently from the impact of the opinions voiced on the price of that instrument, without having simultaneously disclosed that conflict of interest to the public in a proper and effective way; [Note: Article 1.2 Market Abuse Directive]
  2. (2) a transaction or series of transactions that are designed to conceal the ownership of a qualifying investment, so that disclosure requirements are circumvented by the holding of the qualifying investment in the name of a colluding party, such that disclosures are misleading in respect of the true underlying holding. These transactions are often structured so that market risk remains with the seller. This does not include nominee holdings;
  3. (3) pump and dump - that is, taking a long position in a qualifying investment and then disseminating misleading positive information about the qualifying investment with a view to increasing its price;
  4. (4) trash and cash - that is, taking a short position in a qualifying investment and then disseminating misleading negative information about the qualifying investment, with a view to driving down its price.

Factors to be taken into account in determining whether or not behaviour amounts to market abuse (manipulating devices)

MAR 1.7.3

See Notes

handbook-evidential-provisions
In the opinion of the FSA , the following factors are to be taken into account in determining whether or not a fictitious device or other form of deception or contrivance has been used, and are indications that it has:
  1. (1) if orders to trade given or transactions undertaken in qualifying investments by persons are preceded or followed by dissemination of false or misleading information by the same persons or persons linked to them;
  2. (2) if orders to trade are given or transactions are undertaken in qualifying investments by persons before or after the same persons or persons linked to them produce or disseminate research or investment recommendations which are erroneous or biased or demonstrably influenced by material interest. [Note: Article 5 2003/124/EC]

MAR 1.8

Market abuse (dissemination)

MAR 1.8.1

See Notes

handbook-uk-text

Table: section 118(7) of the Act

MAR 1.8.2

See Notes

handbook-uk-text

Table: section 118A(4) of the Act

Descriptions of behaviour that amount to market abuse (dissemination)

MAR 1.8.3

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA , market abuse (dissemination):
(1) knowingly or recklessly spreading false or misleading information about a qualifying investment through the media, including in particular through an RIS or similar information channel;
(2) undertaking a course of conduct in order to give a false or misleading impression about a qualifying investment.

Factors to be taken into account in determining whether or not behaviour amounts to market abuse (dissemination)

MAR 1.8.4

See Notes

handbook-evidential-provisions
In the opinion of the FSA, if a normal and reasonable person would know or should have known in all the circumstances that the information was false or misleading, that indicates that the person disseminating the information knew or could reasonably be expected to have known that it was false or misleading.

MAR 1.8.5

See Notes

handbook-evidential-provisions
In the opinion of the FSA, if the individuals responsible for dissemination of information within an organisation could only know that the information was false or misleading if they had access to other information that was being held behind a Chinese wall or similarly effective arrangements, that indicates that the person disseminating did not know and could not reasonably be expected to have known that the information was false or misleading.

Examples of market abuse (dissemination)

MAR 1.8.6

See Notes

handbook-evidential-provisions
The following are examples of behaviour which may amount to market abuse (dissemination):
  1. (1) a person posts information on an Internet bulletin board or chat room which contains false or misleading statements about the takeover of a company whose shares are qualifying investments and the person knows that the information is false or misleading;
  2. (2) a person responsible for the content of information submitted to a regulatory information service submits information which is false or misleading as to qualifying investments and that person is reckless as to whether the information is false or misleading.

MAR 1.9

Market abuse (misleading behaviour) & market abuse (distortion)

MAR 1.9.1

See Notes

handbook-evidential-provisions

Table: section 118(8) of the Act:

Descriptions of behaviour that amount to market abuse (misleading behaviour) under section 118(8)(a) or market abuse (distortion) under section 118(8)(b)

MAR 1.9.2

See Notes

handbook-evidential-provisions
The following behaviours are, in the opinion of the FSA, market abuse (misleading behaviour) if they give, or are likely to give, a regular user of the market a false or misleading impression:
  1. (1) the movement of physical commodity stocks, which might create a misleading impression as to the supply of, or demand for, or price or value of, a commodity or the deliverable into a commodity futures contract; and
  2. (2) the movement of an empty cargo ship, which might create a false or misleading impression as to the supply of, or the demand for, or the price or value of a commodity or the deliverable into a commodity futures contract.

MAR 1.9.2A

See Notes

handbook-evidential-provisions
Failure by a person to give adequate disclosure that he has reached or exceeded a disclosable short position where:
  1. (1) that position relates, directly or indirectly, to securities which are the subject of a rights issue; and
  2. (2) the disclosable short position is reached or exceeded during a rights issue period;
is behaviour which, in the opinion of the FSA, is market abuse (misleading behaviour).

MAR 1.9.2B

See Notes

handbook-rule
For the purposes of MAR 1.9.2A E, "adequate disclosure" means disclosure made on a RIS by no later than 3.30pm on the business day following the date on which the disclosable short position is reached or exceeded. The disclosure must include the name of the person who has the disclosable short position, the disclosable short position and the name of the issuer of the qualifying instruments.

Short selling in relation to financial sector companies

MAR 1.9.2C

See Notes

handbook-evidential-provisions
  1. (1) [deleted]
  2. (2) [deleted]
  3. (3) [deleted]
  4. (4) [deleted]

MAR 1.9.2D

See Notes

handbook-evidential-provisions
  1. (1) Failure by a person who has a disclosable short position in a UK financial sector company to provide adequate ongoing disclosure of their position is behaviour which, in the opinion of the FSA, is market abuse (misleading behaviour).
  2. (2) In (1), "adequate ongoing disclosure" means disclosure made on a RIS by no later than 3.30pm on the business day followingthe day on which the position reaches, exceeds or falls below a disclosable short position of 0.25%, 0.35%, 0.45% and 0.55% of the issued share capital of the company and each 0.1% threshold thereafter.
    1. (a) [deleted]
    2. (b) [deleted]
  3. (2A) The disclosure referred to in (1)must include the name of the person who has the position, the amount of the disclosable short position and the name of the company in relation to which it has that position.
  4. (3) For the avoidance of doubt, changes in a disclosable short position between the thresholds referred to in (2) do not need to be disclosed under this section. For example, an increase from 0.25% to 0.31% of the issued share capital of the company does not need to be disclosed.
  5. (4) For the avoidance of doubt, (1) applies during a rights issue period.
  6. (5) [deleted]

Factors to be taken into account: false or misleading impressions

MAR 1.9.4

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not behaviour is likely to give a regular user a false or misleading impression as to the supply of or the demand for or as to the price or value of one or more qualifying investments or related investments:
  1. (1) the experience and knowledge of the users of the market in question;
  2. (2) the structure of the market, including its reporting, notification and transparency requirements;
  3. (3) the legal and regulatory requirements of the market concerned;
  4. (4) the identity and position of the person responsible for the behaviour which has been observed (if known); and
  5. (5) the extent and nature of the visibility or disclosure of the person's activity.

Factors to be taken into account: standards of behaviour

MAR 1.9.5

See Notes

handbook-evidential-provisions
In the opinion of the FSA, the following factors are to be taken into account in determining whether or not behaviour that creates a false or misleading impression as to, or distorts the market for, a qualifying investment, has also failed to meet the standard expected by a regular user:
  1. (1) if the transaction is pursuant to a prior legal or regulatory obligation owed to a third party;
  2. (2) if the transaction is executed in a way which takes into account the need for the market as a whole to operate fairly and efficiently; or
  3. (3) the characteristics of the market in question, including the users and applicable rules and codes of conduct (including, if relevant, any statutory or regulatory obligation to disclose a holding or position, such as under DTR 5;
  4. (4) the position of the person in question and the standards reasonably to be expected of him in light of his experience, skill and knowledge;
  5. (5) if the transaction complied with the rules of the relevant prescribed markets about how transactions are to be executed in a proper way (for example, rules on reporting and executing cross-transactions); and
  6. (6) if an organisation has created a false or misleading impression, whether the individuals responsible could only know they were likely to create a false or misleading impression if they had access to other information that was being held behind a Chinese wall or similarly effective arrangements.

MAR 1.10

Statutory exceptions

Behaviour that does not amount to market abuse (general): buy-back programmes and stabilisation

MAR 1.10.1

See Notes

handbook-guidance
  1. (1) Behaviour which conforms with articles 3 to 6 of the Buy-back and Stabilisation Regulation (see MAR 1 Annex 1) will not amount to market abuse.
  2. (2) See MAR 2 in relation to stabilisation.
  3. (3) Buy-back programmes which are not within the scope of the Buy-back and Stabilisation Regulation are not, in themselves, market abuse.

FSA rules

MAR 1.10.2

See Notes

handbook-guidance

There are no rules which permit or require a person to behave in a way which amounts to market abuse. Some rules contain a provision to the effect that behaviour conforming with that rule does not amount to market abuse:

  1. (1) the control of information rule (SYSC 10.2.2 R (1) (see SYSC 10.2.2 R (4))); and
  2. (2) those parts of the Part 6 rules which relate to the timing, dissemination or availability, content and standard of care applicable to a disclosure, announcement, communication or release of information (see in particular the Disclosure Rules and Transparency Rules).

Takeover Code

MAR 1.10.3

See Notes

handbook-guidance
There are no rules in the Takeover Code, which permit or require a person to behave in a way which amounts to market abuse.

MAR 1.10.4

See Notes

handbook-conduct
Behaviour conforming with any of the rules of the Takeover Code about the timing, dissemination or availability, content and standard of care applicable to a disclosure, announcement, communication or release of information, does not, of itself, amount to market abuse, if:
  1. (1) the rule is one of those specified in the table in MAR 1.10.5 C;
  2. (2) the behaviour is expressly required or expressly permitted by the rule in question (the notes for the time being associated with the rules identified in the Takeover Code are treated as part of the relevant rule for these purposes); and
  3. (3) it conforms to any General Principle set out at Section B of the Takeover Code relevant to that rule.

MAR 1.10.5

See Notes

handbook-conduct

Table: Provisions of the Takeover Code conformity with which will not, of itself, amount to market abuse (This table belongs to MAR 1.10.4C):

MAR 1.10.6

See Notes

handbook-conduct
Behaviour conforming with Rule 4.2 of the Takeover Code (in relation to restrictions on dealings by offerors and concert parties) does not, of itself, amount to market abuse, if:
  1. (1) the behaviour is expressly required or expressly permitted by that rule (the notes for the time being associated with the rules identified in the Takeover Code are treated as part of the rule for these purposes); and
  2. (2) it conforms to any General Principle set out at Section B of the Takeover Code relevant to the rule.

MAR 1 Annex 1

Provisions of the Buy-back and Stabilisation Regulation relating to buy-back programmes

MAR 1 Annex 1.1

MAR 1 Annex 2

Accepted Market Practices

See Notes

handbook-guidance
[deleted]