ENF 6.4 Section 381: the power

Under section 381 of the Act (Injunctions in cases of market abuse), the FSA has power to apply to court for an injunction against persons, whether authorised or not, in cases of market abuse. The Secretary of State for Trade and Industry has no power to apply for injunctions under this section of the Act.

Sections 381(1), (2), (3) and (4) set out the grounds upon which the court may grant an injunction.

1. (1)

   Under section 381(1), the FSA may apply to court for an injunction restraining or prohibiting market abuse.

2. (2)

   Section 381(1) states, 'If, on the application of the FSA, the court is satisfied:

   1. (a)

      that there is a reasonable likelihood that any person will engage in market abuse; or

   2. (b)

      that any person is or has engaged in market abuse and that there is a reasonable likelihood that the market abuse will continue or be repeated,

   the court may make an order restraining (or in Scotland an interdict prohibiting) the market abuse.'

1. (1)

   Under section 381(2), the FSA may apply to court for an injunction requiring a person to take steps to remedy market abuse.

2. (2)

   Section 381(2) states, 'If on the application of the FSA the court is satisfied:

   1. (a)

      that any person is or has engaged in market abuse; and

   2. (b)

      that there are steps which could be taken for remedying the market abuse,

   the court may make an order requiring him to take such steps as the court may direct to remedy it.'

Under section 381(6), 'remedying the market abuse' (see ENF 6.4.3 G) includes mitigating the effect of the market abuse.

Section 381(4) states, 'The court may make an order restraining (or in Scotland an interdict prohibiting) the person concerned from disposing of, or otherwise dealing with, any assets of his which it is satisfied that he is reasonably likely to dispose of, or otherwise deal with.'

Section 381(3) states that section 381(4) (see ENF 6.4.4 G) applies if '...on the application of the FSA, the court is satisfied that any person (a) may be engaged in market abuse; or (b) may have been engaged in market abuse.'