Market Abuse

1. Market Abuse

AFSA sets out specific definitions for market abuse, as follows:

(a) unlawful disclosure of Inside Information

(b) engaging or attempting to engage in Insider Dealing

(d) inducing another Person to engage in Insider Dealing

(e) engaging or attempting to engage in Market Manipulation

AFSA prioritises the prevention, detection, and punishment of market abuse to achieve AFSA’s statutory objectives of protecting consumers, promoting competition, and enhancing market integrity. AFSA also collaborates with the financial services industry and other regulators to combat financial crime, and to educate market participants.

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2. Market Manipulation

AFSA defines and prohibits market manipulation. This offence captures attempted manipulation, including of benchmarks and, in some situations, spot commodity markets.

The following activities constitute Market Manipulation:

Entering a transaction, placing an order to trade or any other behaviour which:

gives, or is likely to give, false or misleading signals as to the supply of, or demand for, or price of, a Security; or
secures, or is likely to secure, the price of one or several Securities at an abnormal or artificial level;
Entering into transactions that affect the price of one or several Securities;
Any forms of deception or contrivance;
False or misleading information in the media which can abnormally effect the price of a Security or other financial instrument; or
Transmitting false or misleading information in relation to a benchmark or index.

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3. Insider Dealing

The following amount to Insider Dealing:

(a) the use, by a Person who possesses Inside information, of that information by acquiring or disposing of, for its own account or for the account of a third party, directly or indirectly, Securities to which that information relates; or

(b) the use of Inside Information by cancelling or amending an order concerning a Security to which the information relates where the order was placed before the Person concerned possessed the Inside Information; or

(c) the use of recommendations or inducements to engage in Insider Dealing as per Market Rules 5.3.2 (Recommending or Inducing Insider Dealing), where the Person using the recommendation or inducement knows or ought to know that it is based on Inside Information.

4. Market Soundings

AFSA sets out a framework to make legitimate disclosures of inside information during market soundings. Provided certain requirements are met, market participants making such disclosures are protected from an allegation of unlawful disclosure of inside information.

The following constitutes Market Sounding:

(a) the communication of information, prior to the announcement of a transaction, in order to gauge the interest of potential investors in a possible transaction and the conditions relating to it, such as its potential size or pricing, to one or more potential investors, by:

(i) an Issuer; or

(ii) a secondary offeror of a Security, in such quantity or value that the transaction is distinct from ordinary trading and involves a selling method based on the prior assessment of potential interest from potential investors; or

(iii) a third party acting on behalf or on the account of a Person referred to in (i) or (ii); and

(iv) disclosure of Inside Information by a Person intending to make a Takeover bid for the Securities of a company or a merger with a company to parties entitled to the Securities, will also constitute a market sounding.

(v) disclosure of Inside Information by a Person intending to make a Takeover bid for the Securities of a company or a merger with a company to parties entitled to the Securities, will also constitute a market sounding, provided that:

(vi) the information is necessary to enable the parties entitled to the Securities to form an opinion on their willingness to offer their Securities: and

(vii) the willingness of parties entitled to the Securities to offer their Securities is reasonably required for the decision to make the Takeover bid or merger.

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