Market abuse

Market abuse may arise in circumstances where financial market investors have been unreasonably disadvantaged, directly or indirectly, by others who:[1]

* 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):[1]

1. 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
2. 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,[2] 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.

## See also

* Anti-competitive practices
* Insider trading
* Financial Services and Markets Act 2000
* EU law
* ISO 37001 Anti-bribery management systems
* Group of States Against Corruption
* International Anti-Corruption Academy
* United Nations Convention against Corruption
* OECD Anti-Bribery Convention

## References

1. ↑ 1.0 1.1 EU Legislation Summaries: Market abuse
2. ↑ Willemijn de Jong (21 January 2013). "Tackling financial market abuse in the EU". http://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130440/LDM_BRI(2013)130440_REV1_EN.pdf. Retrieved 18 December 2013.

## Further reading

* Avgouleas, Emilios E (2005). The mechanics and regulation of market abuse: a legal and economic analysis. Oxford University Press. ISBN 978-019924452-2.