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Status: You are viewing the version of the handbook as on 2016-06-30.

MAR 1.1 Application and interpretation

Application and purpose

[Note: ESMA has also issued guidelines under article 16(3) of the ESMA Regulation covering various topics relating to automated trading and direct electronic access.

See www.esma.europa.eu/system/files/esma_2012_122_en.pdf]
MAR 1.1.1GRP

2This chapter (which contains the Code of Market Conduct) applies to all persons seeking guidance on the market abuse regime.

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MAR 1.1.1AG

4References in MAR 1 to the Act should be read to mean the Act as modified by the RAP regulations where the relevant behaviour occurs in relation to qualifying investments which are offered for sale on a prescribed auction platform.

MAR 1.1.2GRP

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. (1)

    want to avoid engaging in market abuseor to avoid requiring or encouraging another to do so; or

  2. (2)

    want to determine whether they are required by SUP 15.10 (Reporting suspicious transactions (market abuse)) to report a transaction to the FCA as a suspicious one.

MAR 1.1.3GRP

The FCA's statement of policy about the imposition and amount of penalties in cases of market abuse (required by section 124 of the Act) is in DEPP 6 3 .

3

Using MAR 1

MAR 1.1.4GRP
  1. (1)

    Assistance in the interpretation of MAR 1 (and the remainder of the Handbook ) is given in the Readers' Guide to the Handbook and in GEN 2 (Interpreting the Handbook). This includes an explanation of the status of the types of provision used (see in particular chapter six of the Readers' Guide to the Handbook).

  2. (2)

    Provisions designated with "C" indicate behaviour which conclusively, for the purposes of the Act, does not amount to market abuse (see section 122(1) of the Act ).

MAR 1.1.5G

Part VIII of the Act, and in particular section 118, specifies types of behaviour which can amount to market abuse . This chapter considers the general concepts relevant to market abuse, then each type of behaviour in turn and then describes exceptions to market abuse which are of general application. In doing so, it sets out the relevant provisions of the Code of Market Conduct, that is:

4
  1. (1)

    descriptions of behaviour that, in the opinion of the FCA , do or do not amount to market abuse (see section 119(2)(a) and (b) and section 122 of the Act);

  2. (2)

    descriptions of behaviour that are or are not accepted market practices in relation to one or more identified markets (see section 119(2)(d) and (e) and section 122(1) of the Act (subject to the behaviour being for legitimate reasons)); and

  3. (3)

    factors that, in the opinion of the FCA , are to be taken into account in determining whether or not behaviour amounts to market abuse (see section 119(2)(c) and section 122(2) of the Act ).

MAR 1.1.6GRP

The Codedoes not exhaustively describe all types of behaviour market abuse. In particular, the descriptions of behaviour which, in the opinion of the FCA , amount to market abuseshould be read in the light of:

  1. (1)

    the elements specified by the Act as making up the relevant type of market abuse; and

  2. (2)

    any relevant descriptions of behaviour which , in the opinion of the FCA, do not amount to market abuse .

MAR 1.1.7GRP

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.

MAR 1.1.8GRP

For the avoidance of doubt, it should be noted that any reference in the Code to "profit" refers also to potential profits, avoidance of loss or potential avoidance of loss.