Market abuse: Difference between revisions
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Market abuse is the term used to describe any misuse of confidential or non public information so as to attempt to gain a trading advantage. | Market abuse is the term used to describe any misuse of confidential or non public information so as to attempt to gain a trading advantage. | ||
Market abuse also encompasses: | Market abuse also encompasses: | ||
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# Manipulating devices. | # Manipulating devices. | ||
# Misleading dissemination. | # Misleading dissemination. | ||
For example trading in a company's shares whilst in the possession of inside information that a profits warning was about to be announced would be insider trading and therefore market abuse. | For example trading in a company's shares whilst in the possession of inside information that a profits warning was about to be announced would be insider trading and therefore market abuse. | ||
====Legislation==== | ====Legislation==== | ||
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The Market Abuse Regulation (MAR) and the Criminal Sanctions for Market Abuse (CSMAD) form the legislative proposals which make up MAD II. | The Market Abuse Regulation (MAR) and the Criminal Sanctions for Market Abuse (CSMAD) form the legislative proposals which make up MAD II. | ||
MAD II came into force across the EU in 2014. | MAD II came into force across the EU in 2014. | ||
Revision as of 15:17, 4 December 2015
Market abuse is the term used to describe any misuse of confidential or non public information so as to attempt to gain a trading advantage.
Market abuse also encompasses:
- Insider dealing.
- Improper disclosure.
- Manipulating transactions.
- Manipulating devices.
- Misleading dissemination.
For example trading in a company's shares whilst in the possession of inside information that a profits warning was about to be announced would be insider trading and therefore market abuse.
Legislation
Legislation exists in most financial markets to specify the detail of what is prohibited as market abuse and within the EU this was covered by the Market Abuse Directive (Directive 2003/6/EC).
The Market Abuse Directive (MAD) was revised and replaced by MAD II which widens its scope to include new markets and instruments.
The Market Abuse Regulation (MAR) and the Criminal Sanctions for Market Abuse (CSMAD) form the legislative proposals which make up MAD II.
MAD II came into force across the EU in 2014.
MAD II is due to become law across the EU during 2016.
See also
Other links
Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003
