Related provisions for MAR 1.2.1
1 - 20 of 45 items.
(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) See MAR 2 in relation to stabilisation.(3) Buy-back programmes which are not within the scope of the Buy-back and Stabilisation Regulation are not, in themselves, market abuse.
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) COB 2.4.4 R (1) (Chinese walls) (see COB 2.4.4 R (4));2the control of information rule (SYSC 10.2.2 R (1) (see SYSC 10.2.2 R (4)));2 and(2) those parts of the Part 6 rules which relate to the timing, dissemination or availability, content and standard of care
Behaviour conforming with any of the rules of the Takeover Codeabout 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) the behaviour is expressly required or expressly permitted by the rule in question (the notes for the time being associated with the rules
1Table: Provisions of the Takeover Code conformity with which will not, of itself, amount to market abuse (This table belongs to MAR 1.10.4C):1
Takeover Code provisions: |
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Disclosure of information which is not generally available |
1(a) 2.1 plus notes, 2.5, 2.6, 2.9 plus notes 8 19.7 20.1, 20.2, 20.3 28.4 37.3(b) and 37.4(a) |
Standards of care |
2.8 first sentence and note 4 19.1, 19.5 second sentence and note 2, 19.8 23 plus notes 28.1 |
Timing of announcements, documentation and dealings |
2.2, 2.4(b) 5.4 6.2(b) 7.1 11.1 note 6 only 17.1 21.2 30 31.6(c), 31.9 33 (in so far as it refers 31.6(c) and 31.9 only) 38.5 |
Content of announcements |
2.4 (a) and (b) 19.31 |
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) 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) it conforms to any General Principle set out at Section B of the Takeover Code
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) and the auction regulation.4 It is therefore likely to be helpful to persons who:(1) want to avoid engaging in market abuseor to avoid requiring or encouraging another
The Code does not exhaustively describe all types of
behaviourmarket abuse. In particular, the descriptions of
behaviour
which, in the opinion of the
FCA
, amount to market abuse should be read in the light of: (1) the elements specified by the Act as making up the relevant type of market abuse; and(2) any relevant descriptions of
behaviour
which , in the opinion of the
FCA
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.
(1) The FCA3 will determine a figure dependent on the seriousness of the market abuse and whether or not it was referable to the individual’s employment. This reflects the FCA's3 view that where an individual has been put into a position where he can commit market abuse because of his employment the fine imposed should reflect this by reference to the gross amount of all benefits derived from that employment.33(2) In cases where the market abuse was referable to the individual’s
(1) The FCA3 may increase or decrease the amount of the financial penalty arrived at after Step 2, but not including any amount to be disgorged as set out in Step 1, to take into account factors which aggravate or mitigate the market abuse. Any such adjustments will be made by way of a percentage adjustment to the figure determined at Step 2.3(2) The following list of factors may have the effect of aggravating or mitigating the market abuse:(a) the conduct of the individual in
(1) If the FCA3 considers the figure arrived at after Step 3 is insufficient to deter the individual who committed the market abuse, or others, from committing further or similar abuse then the FCA3 may increase the penalty. Circumstances where the FCA3 may do this include:333(a) where the FCA3 considers the absolute value of the penalty too small in relation to the market abuse to meet its objective of credible deterrence;3(b) where previous FCA3 action in respect of similar
2In some cases there will be instances of market misconduct that may arguably involve a breach of the criminal law as well as market abuse as defined in section 118 of the Act. When the FCA decides whether to commence criminal proceedings rather than impose a sanction for market abuse in relation to that misconduct, it will apply the basic principles set out in the Code for Crown Prosecutors. When deciding whether to prosecute market misconduct which also falls within the definition
2The factors which the FCA may consider when deciding whether to commence a criminal prosecution for market misconduct rather than impose a sanction for market abuse include, but are not limited to, the following: (1) the seriousness of the misconduct: if the misconduct is serious and prosecution is likely to result in a significant sentence, criminal prosecution may be more likely to be appropriate; (2) whether there are victims who have suffered loss as a result of the misconduct:
2It is the FCA's
policy not to impose a sanction for market abuse where a person is being prosecuted for market misconduct or has been finally convicted or acquitted of market misconduct (following the exhaustion of all appeal processes) in a criminal prosecution arising from substantially the same allegations. Similarly, it is the FCA's
policy not to commence a prosecution for market misconduct where the FCA has brought or is seeking to bring
1The FCA has a range of powers it can use to take remedial, protective and disciplinary action against a person who has contravened a relevant requirement or engaged in market abuse, as well as its powers to seek injunctions under sections 380 and 381 of the Act and under the courts' inherent jurisdiction. Where appropriate, the FCA may exercise these other powers before, at the same time as, or after it applies for an injunction against a person.
1The FCA'sown-initiative powers do not apply to unauthorised persons. This means that an application for an injunction is the only power by which the FCA may seek directly to prevent unauthorised persons from actual or threatened breaches or market abuse. The FCA will decide whether an application against an unauthorised person is appropriate, in accordance with the approach discussed in paragraph 10.2.2. The FCA may also seek an injunction to secure assets where it intends to
2The FCA may apply to the court for an injunction if it appears that a person, whether authorised or not, is reasonably likely to breach a relevant requirement12, or engage in market abuse. It can also apply for an injunction if a person has breached one of those requirements or has engaged in market abuse and is likely to continue doing so. 12 Under section 380(6)(a) and (7)(a), a 'relevant requirement' in relation to an application by the appropriate regulator means a requirement:
2The FCA may consider taking action for a financial penalty or public censure, as well as seeking restitution, if a person has breached a relevant requirement13, or has engaged in, or required or encouraged others to engage in, market abuse. 13 Under section 204A(2), a 'relevant requirement' in relation to an application by the appropriate regulator means a requirement: which is imposed by or under the Act or by a qualifying EU provision specified, or of a description specified,
The following are examples of
behaviour
that might fall within the scope of section 123(1)(b) :(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) a person recommends or advises a friend to engage in
behaviour
which, if he himself engaged
Listing Principle 13 is intended to ensure that listed companies have adequate procedures, systems and controls to enable them to comply with their obligations under the listing rules, disclosure rules, transparency rules and corporate governance rules.3 In particular, the FCA considers that listed companies should place particular emphasis on ensuring that they have adequate procedures, systems and controls in relation to, where applicable:333(1) identifying whether any obligations
Timely and accurate disclosure of information to the market is a key obligation of listed companies. For the purposes of Listing Principle 13, a listed company should have adequate systems and controls to be able to:3313(1) ensure that it can properly identify information which requires disclosure under the listing rules, disclosure rules, transparency rules or corporate governance rules3 in a timely manner; and3(2) ensure that any information identified under (1) is properly
When deciding whether to take action for market abuse or requiring or encouraging, the FCA4 may consider the following additional factors:4(1) The degree of sophistication of the users of the market in question, the size and liquidity of the market, and the susceptibility of the market to market abuse.(2) The impact, having regard to the nature of the behaviour, that any financial penalty or public censure may have on the financial markets or on the interests of consumers:(a)
The FCA4 will not take action against a person over behaviour which (a) conforms with the Takeover Code or rules of an RIE and (b) falls within the terms of any provision of the Code of Market Conduct which states that behaviour so conforming does not amount to market abuse. The FCA4 will seek the Takeover Panel's or relevant RIE's views on whether behaviour complies with the Takeover Code or RIE rules and will attach considerable weight to its views.44
Where the behaviour of a person which amounts to market abuse is behaviour to which the Takeover Code is relevant, the use of the Takeover Panel's powers will often be sufficient to address the relevant concerns. In cases where this is not so, the FCA4 will need to consider whether it is appropriate to use any of its own powers under the market abuse regime. The principal circumstances in which the FCA4 is likely to consider such exercise are:44(1) where the behaviour falls within
1An issuer should be aware that matters that
fall within the scope of this chapter may also fall within the scope of:(1) the market abuse regime set out
in section 118 of the Act;(2) Part 7 (Offences relating to
Financial Services) of the Financial Services Act 2012 relating to misleading
statements and practices;(3) Part V of the Criminal Justice
Act 1993 relating to insider dealing; and(4) the Takeover
Code.
Where a UK recognised body has evidence tending to suggest that any person has:(1) been carrying on any regulated activity in the United Kingdom in contravention of the general prohibition; or(2) been engaged in market abuse; or(3) committed a criminal offence under the Act or subordinate legislation made under the Act; or(4) committed a criminal offence under Part V of the Criminal Justice Act 1993 (Insider dealing); or(5) committed a criminal offence under the Money Laundering
1A firm operating an MTF must:(1) report to the FCA:(a) significant breaches of the firm's rules;(b) disorderly trading conditions; and(c) conduct that may involve market abuse; (2) supply the information required under this rule without delay to the FCA and any other authority competent for the investigation and prosecution of market abuse; and (3) provide full assistance to the FCA, and any other authority competent for the investigation and prosecution of market abuse, in
1In investigations into possible
insider dealing,market abuse, misleading statements and practices offences, breaches of the general prohibition, the restriction on financial promotion, or the prohibition on promoting collective investment schemes, the investigator may not know the identity of the perpetrator or may be looking into market circumstances at the outset of the investigation rather than investigating a particular person. In those circumstances,
6A firm operating an MTF must:(1) have effective arrangements and procedures, relevant to the MTF, for the regular monitoring of the compliance by its users with its rules; and(2) monitor the transactions undertaken by its users under its systems in order to identify breaches of those rules, disorderly trading conditions or conduct that may involve market abuse.[Note: Article 26(1) of MiFID]
The following are indicators of whether action by the FCA or one of the other agencies is more appropriate. They are not listed in any particular order or ranked according to priority. No single feature of the case should be considered in isolation, but rather the whole case should be considered in the round.(a) Tending towards action by the FCAWhere the suspected conduct in question gives rise to concerns regarding market confidence or protection of consumers of services regulated
The agencies will consider, as necessary, and keep under review whether an investigation has reached the point where it is appropriate to commence proceedings. Where agencies are deciding whether to institute criminal proceedings, they will have regard to the usual codes or guidance relevant to that decision. For example, agencies other than the PPS or COPFS will have regard to the Code for Crown Prosecutors (Note: Different guidance applies to the PPS and COPFS. All criminal
2Articles 26a, 26b and 26c respectively provide for a proportionate disclosure regime for rights issues (as defined by the PD Regulation); for small and medium-sized enterprises and companies with reduced market capitalisation; and for issues by credit institutions referred to in Article 1 (2) (j) of the PD.4
Proportionate schedule for rights issues |
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26a |
1. |
The proportionate schedules set out in Annexes XXIII and XXIV shall apply to rights issues, provided that the issuer has shares of the same class already admitted to trading on a regulated market or a multilateral trading facility as defined in point 15 of Article 4(1) of Directive 2004/39/EC of the European Parliament and of the Council. |
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2. |
Issuers whose shares of the same class are already admitted to trading on a multilateral trading facility can only make use of the schedules set out in Annexes XXIII and XXIV when the rules of that multilateral trading facility contain the following: |
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(a) |
provisions requiring issuers to publish annual financial statements and audit reports within six months after the end of each financial year, half yearly financial statements within four months after the end of the first six months of each financial year and make public inside information as defined in point 1 of the first paragraph of Article 1 of Directive 2003/6/EC pursuant to Article 6 of that Directive; |
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(b) |
provisions requiring issuers to make the reports and information referred to in point (a) available to the public by publishing them on their websites; |
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(c) |
provisions preventing insider dealing and market manipulation in accordance with Directive 2003/6/EC. |
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3. |
A statement at the beginning of the prospectus shall indicate clearly that the rights issue is addressed to shareholders of the issuer and that the level of disclosure of the prospectus is proportionate to that type of issue. |
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Proportionate schedules for small and medium-sized enterprises and companies with reduced market capitalisation |
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26b |
The proportionate schedules set out in Annexes XXV to XXVIII shall apply when securities issued by small and medium-sized enterprises and companies with reduced market capitalisation are offered to the public or admitted to trading on a regulated market situated or operating within a Member State. |
However, small and medium-sized enterprises and companies with reduced market capitalisation may instead choose to draw up a prospectus in accordance with the schedules set out Annexes I to XVII and XX to XXIV. |
Proportionate requirements for issues by credit institutions referred to in Article 1(2)(j) of Directive 2003/71/EC |
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26c |
Credit institutions issuing securities referred to in Article 1(2)(j) of Directive 2003/71/EC that draw up a prospectus in accordance with Article 1(3) of that Directive may choose to include in their prospectus historical financial information covering only the last financial year, or such shorter period that the issuer has been in operation, in accordance with Annex XXIX to this Regulation. |