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MAR 1.9 Market abuse (misleading behaviour) & market abuse (distortion)

MAR 1.9.1E

Table: section 118(8) of the Act:

"The seventh [type of behaviour] is where the [behaviour] (not [amounting to market abuse (manipulating transactions), market abuse (manipulating devices), or market abuse (dissemination)])

(a)

is likely to give, a [regular user] of the market a false or misleading impression as to the supply of, demand for or price or value of, [qualifying investments] [market abuse (misleading behaviour)]; or

(b)

would be, or would be to likely to be, regarded by a [regular user] of the market as [behaviour] that would distort, or would be likely to distort, the market in such an investment [market abuse (distortion)]

and ... is likely to be regarded by a [regular user] of the market as a failure on the part of the person concerned to observe the standard of [behaviour] reasonably expected of a person in his position in relation to the market

MAR 1.9.1AUK

Table: section 118(8) of the Act as modified by the RAP Regulations

11 1"The seventh [type of behaviour] is where the [behaviour] (not [amounting to market abuse (manipulating transactions), market abuse (manipulating devices) or market abuse (dissemination)]

(a)

is likely to give a [regular user] of the auction platform a false or misleading impression as to the supply of, demand for or price or value of, [qualifying investments] [market abuse (misleading behaviour)], or

(b)

would be, or would be likely to be, regarded by a [regular user] of the auction platform as [behaviour] that would distort, or would be likely to distort, the auction of such an investment [market abuse (distortion)]

and the behaviour is likely to be regarded by a [regular user] of the auction platform as a failure on the part of the [person] concerned to observe the standard of [behaviour] reasonably expected of a [person] in his position in relation to the market."

Descriptions of behaviour that amount to market abuse (misleading behaviour) under section 118(8)(a) or market abuse (distortion) under section 118(8)(b)

MAR 1.9.2G

The following behaviours are, in the opinion of the FCA , market abuse (misleading behaviour) if they give, or are likely to give, a regular user of the market a false or misleading impression:

  1. (1)

    the movement of physical commodity stocks, which might create a misleading impression as to the supply of, or demand for, or price or value of, a commodity or the deliverable into a commodity futures contract; and

  2. (2)

    the movement of an empty cargo ship, which might create a false or misleading impression as to the supply of, or the demand for, or the price or value of a commodity or the deliverable into a commodity futures contract.

MAR 1.9.2AE
5
  1. (1)

    [deleted]10

    10
  2. (2)

    [deleted]10

    10

[deleted]10

10
MAR 1.9.2BR

10[deleted]

5

Short selling in relation to financial sector companies

MAR 1.9.2CE
  1. (1)

    6

    8

    [deleted]8

    8
  2. (2)

    [deleted]8

    8
  3. (3)

    [deleted]8

    8
  4. (4)

    [deleted]8

    8
8
MAR 1.9.2DE
  1. (1)

    [deleted]10

    610
  2. (2)

    [deleted]10

    878810
    1. (a)

      [deleted]8

      8
    2. (b)

      [deleted]8

      8
    8
  3. (2A)

    [deleted]10

    8810
  4. (3)

    [deleted]10

    8810
  5. (4)

    [deleted]10

    8810
  6. (5)

    [deleted]9

    9
MAR 1.9.2EG

[deleted]8

8
MAR 1.9.3C

[deleted]4

24

Factors to be taken into account: false or misleading impressions

MAR 1.9.4E

In the opinion of the FCA , the following factors are to be taken into account in determining whether or not behaviour is likely to give a regular user a false or misleading impression as to the supply of or the demand for or as to the price or value of one or more qualifying investments or related investments:

  1. (1)

    the experience and knowledge of the users of the market or auction platform11 in question;

  2. (2)

    the structure of the market or auction platform,11 including its reporting, notification and transparency requirements;

  3. (3)

    the legal and regulatory requirements of the market or auction platform11 concerned;

  4. (4)

    the identity and position of the person responsible for the behaviour which has been observed (if known); and

  5. (5)

    the extent and nature of the visibility or disclosure of the person's activity.

Factors to be taken into account: standards of behaviour

MAR 1.9.5E

In the opinion of the FCA , the following factors are to be taken into account in determining whether or not behaviour that creates a false or misleading impression as to, or distorts the market or auction platform11 for, a qualifying investment , has also failed to meet the standard expected by a regular user:

  1. (1)

    if the transaction is pursuant to a prior legal or regulatory obligation owed to a third party;

  2. (2)

    if the transaction is executed in a way which takes into account the need for the market or auction platform11 as a whole to operate fairly and efficiently; or

  3. (3)

    the characteristics of the market or auction platform11 in question, including the users and applicable rules and codes of conduct (including, if relevant, any statutory or regulatory obligation to disclose a holding or position, such as under DTR 5 )11;

    3
  4. (4)

    the position of the person in question and the standards reasonably to be expected of him in light of his experience, skill and knowledge;

  5. (5)

    if the transaction complied with the rules of the relevant prescribed markets or prescribed auction platform11 about how transactions are to be executed in a proper way (for example, rules on reporting and executing cross-transactions); and

  6. (6)

    if an organisation has created a false or misleading impression, whether the individuals responsible could only know they were likely to create a false or misleading impression if they had access to other information that was being held behind a Chinese wall or similarly effective arrangements.