- have used information which is not publicly available (insider dealing)
- have distorted the price-setting mechanism of financial instruments
- have disseminated false or misleading information
Market Abuse is split into two different aspects (under EU definitions):
- Insider dealing: where a person who has information not available to other investors (for example, a director with knowledge of a takeover bid) makes use of that information for personal gain
- Market manipulation: where a person knowingly gives out false or misleading information (for instance, about a company's financial circumstances) in order to influence the price of a share for personal gain
In 2013/2014, the EU updated its legislation on market abuse, and harmonised criminal sanctions. In the 2015 Danish European Union opt-out referendum, the Danish population rejected adoption of the 2014 market abuse directive (2014/57/EU) and much other legislation.
In the UK, the market abuse directive (MAD) was implemented in 2003 to reduce market abuse. It applied to any financial instrument admitted to trading on a regulated market or in respect of which a request for admission to trading had been made. MAD was subsequently replaced by the Market Abuse Regulation (MAR) in 2016.
and subsequently replaced in 2016
- Avgouleas, Emilios E (2005). The mechanics and regulation of market abuse: a legal and economic analysis. Oxford University Press. ISBN 978-019924452-2.
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