MAR 2.1 Application and Purpose
Application
This chapter is available to every person who wishes to show that he acted in conformity with:
- (1)
the Buy-back and Stabilisation Regulation, in accordance with section 118A(5)(b) of the Act; or
- (2)
rules, in accordance with section 118A(5)(a) of the Act; or
- (3)
the price stabilising rules, for the purposes of paragraph 5(1) of Schedule 1 to the Criminal Justice Act 1993 (Insider Dealing); or
- (4)
the price stabilising rules, for the purposes of section 90(9)(b) (Misleading impressions) or section 91(4)(a) (Misleading statements etc in relation to benchmarks) of the Financial Services Act 20122.
2
This chapter:
- (1)
so far as it provides a defence for any person, has the same territorial application as the provision which is alleged to have been contravened; and
- (2)
in its application to a firm for purposes other than those falling within (1), applies to the firm's business carried on from an establishment in the United Kingdom.
Purpose
The purpose of this chapter is to describe the extent to which stabilisation activity has the benefit of a "safe harbour" for market abuse under the Buy-back and Stabilisation Regulation (see MAR 2.2 and MAR 2.3), and to specify by rules the extent to which stabilisation activity has the benefit of a "safe harbour" for market abuse (misuse of information), market abuse (misleading behaviour) or market abuse (distortion) (see MAR 2.2 and MAR 2.4), or for the criminal offences referred to in MAR 2.1.2 G (3) and MAR 2.1.2 G (4) (MAR 2.3 - MAR 2.5).
Stabilisation transactions mainly have the effect of providing support for the price of an offering of relevant securities during a limited time period if they come under selling pressure, thus alleviating sales pressure generated by short term investors and maintaining an orderly market in the relevant securities. This is in the interest of those investors having subscribed or purchased those relevant securities in the context of a significant distribution, and of issuers. In this way, stabilisation can contribute to greater confidence of investors and issuers in the financial markets. [Note: Recital 11 of the Buy-back and Stabilisation Regulation]
Stabilisation activity may be carried out either on or off a regulated market and may be carried out by use of financial instruments other than those admitted or to be admitted to the regulated market which may influence the price of the instrument admitted or to be admitted to trading on a regulated market. [Note: Recital 12 Buy-back and Stabilisation Regulation]