MAR 1.2 Market Abuse: general

Provisions in this section are relevant to more than one of the types of behaviour5 which may amount to market abuse.

The Market Abuse Regulation5 does not require the person engaging in the behaviour5 in question to have intended to commit market abuse.

The5 following factors may5 be taken into account in determining whether or not behaviour5 prior to a request for admission to trading,3 the admission to or the commencement of trading, or the offer for sale on a prescribed auction platform 3 contravenes prohibitions and obligations in the Market Abuse Regulation5 and are indications that it does:

1. (1)

   if it is in relation to 5 financial instruments:5

   3
   1. (a)

      in respect of which a request for admission to trading on a regulated market or MTF5 is subsequently made; and

   2. (b)

      if it continues to have an effect once an application has been made for the financial instrument 5 to be admitted for trading, or it has been admitted to trading on a regulated market or MTF5, respectively 5; or

2. (2)

   3if it is in relation to financial instruments 5 :

   3
   1. (a)

      which are subsequently offered for sale on a prescribed auction platform; and

   2. (b)

      if it continues to have an effect once the financial instruments 5 are offered for sale on a prescribed auction platform.

The5 following factors may5 be taken into account in determining whether or not refraining from action indicates behaviour5which falls under the scope of the Market Abuse Regulation,5 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.

The5 following factors may5 be taken into account in determining whether or not a person who possesses inside information ought to know that it is inside information for the purposes of the final indent of article 8(4) of the Market Abuse Regulation5:

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.

For the purposes of being categorised as an insider in article 8(4) of the Market Abuse Regulation5, the person concerned does not need to know that the information concerned is inside information.

The5 following factors may5 be taken into account in determining whether or not information has been made public5, and are indications that it has5 (and therefore is5 not inside information):

1. (1)

   whether the information has been disclosed to a prescribed market or a prescribed auction platform3 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; and5

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.5

5. (5)

   [deleted]5

1. (1)

   5In relation to the factors in MAR 1.2.12G 5 it is not relevant that the information is only generally available outside the UK.

2. (2)

   In relation to the factors in MAR 1.2.12G 5 it is not relevant that the observation or analysis is only achievable by a person with above average financial resources, expertise or competence.

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 using5information which has been made public5, since it is information which has been obtained by legitimate means through observation of a public event.

5In determining whether there is a pending order 5 for a client in relation to article 7(1)(d) of the Market Abuse Regulation, a factor that may be taken into account is5 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.

6 ESMA has issued guidelines under article 7(5) of the Market Abuse Regulation which relate to the definition of inside information in the context of commodity derivatives.

[Note: the guidelines are available at https://www.esma.europa.eu/document/mar-guidelines-commodity-derivatives.]

The following are examples of behaviour5 that might fall within the scope of article 14(b) of the Market Abuse Regulation5:

1. (1)

   a director of a company, while in possession of inside information, instructs an employee of that company to sell a financial instrument5 in respect of which the information is inside information;

2. (2)

   a person recommends or advises a friend to engage in behaviour5 which, if he himself engaged in it, would amount to market abuse.