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MAR 1 Annex 2 Accepted Market Practices

G

Table: Part 1 - General

1.

G

An accepted market practice features in section 118 in the following ways:

(1)

it is an element in deciding what is inside information in the commodity markets (and see MAR 1.2.17 G to MAR 1.2.19 UK);

(2)

it provides a defence for market abuse (manipulating transactions).

2.

G

The FCA will take the following non-exhaustive factors into account when assessing whether to accept a particular market practice:

(1)

the level of transparency of the relevant market practice to the whole market;

(2)

the need to safeguard the operation of market forces and the proper interplay of the forces of supply and demand (taking into account the impact of the relevant market practice against the main market parameters, such as the specific market conditions before carrying out the relevant market practice, the weighted average price of a single session or the daily closing price);

(3)

the degree to which the relevant market practice has an impact on market liquidity and efficiency;

(4)

the degree to which the relevant practice takes into account the trading mechanism of the relevant market and enables market participants to react properly and in a timely manner to the new market situation created by that practice;

(5)

the risk inherent in the relevant practice for the integrity of, directly or indirectly, related markets, whether regulated or not, in the relevant financial instrument within the whole EEA 3 ;

(6)

the outcome of any investigation of the relevant market practice by any competent authority or other authority mentioned in Article 12(1) of the Market Abuse Directive, in particular whether the relevant market practice breached rules or regulations designed to prevent market abuse, or codes of conduct, be it on the market in question or on directly or indirectly related markets within the EEA 3 ; and

3

(7)

the structural characteristics of the relevant market including whether it is regulated or not, the types of financial instruments traded and the type of market participants, including the extent of retail investors participation in the relevant market.

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