Market Abuse—pre Market Abuse Regulation
Market Abuse—pre Market Abuse Regulation

The following Corporate Crime guidance note provides comprehensive and up to date legal information covering:

  • Market Abuse—pre Market Abuse Regulation
  • Changes to the regulatory market abuse regime
  • Definition of market abuse before 3 July 2016
  • What are qualifying investments and prescribed markets?
  • Who are insiders and what is inside information?
  • Case law on market abuse and insider dealing
  • Regular user test
  • What mental element is required to establish market abuse?
  • Defences to market abuse in the Financial Services and Markets Act 2000
  • Punishment for market abuse

Insider dealing and market manipulation can constitute market abuse. In the UK, there are two distinct regimes running alongside each other which regulate and enforce market abuse and market manipulation:

  1. the civil or regulatory regime, governed by the Financial Services and Markets Act 2000 (FSMA 2000) and, after 3 July 2016, the Market Abuse Regulation (EU) 596/2014, under which the Financial Conduct Authority (FCA) can issue civil fines and penalties for no-compliance with safeguards; and

  2. criminal offences under the Criminal Justice Act 1993 (CJA 1993) and the Financial Services Act 2012 (FSA 2012)

This Practice Note provides an overview of the civil/regulatory regime which governed market abuse and insider dealing before the coming into force of the Market Abuse Regulation (EU) 596/2014 on 3 July 2016. This regime will still apply to infringements and civil offences under FSMA 2000 which occurred before 3 July 2016.

For further information on the criminal regime governing insider dealing and market manipulation, see Practice Notes:

  1. Financial crime in the financial services sector

  2. Misleading statements under the FSA 2012

  3. Misleading impressions under the FSA 2012

  4. Misleading statements etc in relation to benchmarks

  5. Insider dealing

  6. Insider dealing—a quick guide

Changes to the regulatory market abuse regime

Before 3 July 2016, market abuse was defined in FSMA 2000, s 118, as interpreted in the FCA's Code of Market Conduct