Behaviour such as insider dealing and market manipulation can amount to market abuse. Find out more about the safeguards firms must have in place.
Preventing, detecting and punishing market abuse is a high priority for us. It’s important in fulfilling our statutory objectives[2] of protecting consumers, enhancing market integrity and promoting competition.
We work closely with the financial services industry, law enforcement agencies and other regulators to combat market abuse and other related financial crime. We also aim to educate market participants.
Market Abuse Regulation (MAR)
The EU Market Abuse Regulation (EU MAR) came into effect on 3 July 2016 and was onshored into UK law on 31 December 2020 by the EU (Withdrawal) Act 2018.
Changes to the regulation were made by the Market Abuse Exit Regulations 2019[3], to make sure that the onshored legislation (UK MAR) operates effectively in the UK.
The EU technical standards for MAR were also onshored into UK law on 31 December by the EU (Withdrawal) Act 2018 and were amended by FCA 2019/45[4].
Changes to our Handbook were made by FCA 2019/23[5] in relation to the Market Conduct sourcebook, and by FCA 2019/26[6] in relation to the Disclosure Guidance and Transparency Rules sourcebook.
Further changes to UK MAR were made by The Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021[7] to include the UK Emission Trading Scheme, with related changes to technical standards made by FCA/2016/21[8]. Changes to UK MAR were also made by the Financial Services Act 2021[9] in relation to insider lists and managers’ transaction (see section 30 of the Act).
Market abuse offences
The following are civil offences under UK MAR:
- Insider dealing.
- Unlawful disclosure.
- Market manipulation.
- Attempted manipulation.
UK MAR also gives us powers and responsibilities to prevent and detect market abuse.
Criminal insider dealing is an offence under Part V of the Criminal Justice Act 1993.
Criminal market manipulation is an offence under sections 89 to 91 of the Financial Services Act 2012.
Prevention and detection
We work closely with the financial services industry to identify and prevent market abuse.
We also carry out our own surveillance of financial markets and have systems to identify insider dealing and market manipulation in various financial markets. As part of this, we analyse:
- Transaction reporting data.
- Order book data.
- Benchmark submission and other market data.
This significantly helps us to detect market abuse.
Our market monitoring department is also in regular contact with trading firms, market operators and investors to identify suspicious trading.
Operators of UK trading venues must detect and report suspicious transactions and orders to us via suspicious transaction and order reports (STORs).
Persons professionally arranging or executing transactions must also detect and report suspicious transactions and orders. Such persons must report STORs to us where they are registered or have their head office in the UK or, in the case of a branch, where the branch is in the UK.
Enforcement and penalties
We take enforcement action against market abuse and can impose significant penalties.
For breaches of UK MAR we can:
- Impose unlimited fines.
- Order injunctions.
- Prohibit regulated firms or approved persons.
Criminal sanctions for insider dealing and market manipulation can incur custodial sentences of up to 10 years and unlimited fines.
See our list of final notices[11] and related press releases[12] for more on the action we have taken over market abuse.
Find out more about our enforcement process and powers[13].
Report market abuse or contact us
Find out how to report suspected market abuse as a firm or trading venue[14] subject to the requirements of Article 16 of UK MAR.
Find out how to report a market abuse concern as an individual[15].
Reporting requirements
Under UK MAR, firms, issuers, UK emission allowance market participants (EAMPs), and individuals (as applicable) must make the following notifications to us when required:
- Suspicious transaction and order reports[16] (STORs).
- Persons discharging managerial responsibilities (PDMRs) notifications (see the PDMR notification form[17] and a guide to completing it[18]).
- Delaying disclosure of inside information (see the delay disclosure notification form[19] and a guide to completing it[20]).
- Buy-back transactions and stabilisation activity notifications (find out more[10]).
Responding to requests for insider lists
The following entities must transmit their insider lists to us on request:
- Issuers who have requested or approved admission of their financial instruments to trading on a UK regulated market.
- In the case of instruments only traded on a UK multilateral trading facility (MTF) or on a UK organised trading facility (OTF), issuers who have approved trading of their financial instruments on a UK MTF or a UK OTF or have requested admission to trading of their financial instruments on a UK MTF.
- Persons acting on behalf of, or on the account of, an issuer captured above.
- UK emission allowance market participants (UK EAMPs).
- Auction platforms and auctioneers in relation to UK emission allowances or other related auctioned products.
We have a secure system so that issuers or their nominees, UK EAMPs, UK auction platforms and auctioneers can respond to our requests for insider lists.
This system is free to use and gives sufficient security to protect the personal data in insider lists.
When we request an insider list, we’ll provide details of how to send us the information securely.
Market Watch
Our Market Watch newsletter looks at market abuse risks, transaction reporting, suspicious transaction and order reporting, and other market conduct issues.
It can help regulated firms and other non-regulated market users to understand more about these areas and relevant practices to consider.
