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Market Abuse Policy

1. Policy Statement

The company takes seriously any form of market abuse and aims to comply fully with the FCA and EU regulations relating to this area, including the Market Abuse Regulations (EU) No 596/2014 which came into effect on 3rd July 2016 and the FCA’s Market Conduct (MAR) sourcebook. We understand and concur with the need to restore confidence in market integrity whilst enhancing corporate accountability of distortions and manipulations.

It is our aim and constant objective to establish and maintain effective arrangements, systems and procedures aimed at preventing and detecting insider dealing, market manipulation and attempted insider dealing and market manipulation. To this end, all employees will have easy and continual access to such documents, procedures and controls so as to comply with the regulations and laws and to effectively carry out their job role in a compliant and transparent manner.

As a regulated firm, we support and encourage all employees to work in an open and transparent manner and workplace, providing a safe, confidential and compliant environment where employees feel safe to report any concerns that they may have. We operate strict and robust procedures, controls and measures for mitigating against market abuse and provide detailed and continual guidance and training for all staff (and associates) in this area.

Market abuse in any form will not be tolerated by the company and any evidence or suggestion of wrongdoing that is defined as a form of market abuse will be treated with immediate and unwavering disciplinary action in accordance with our own internal procedures and in accordance with the laws and regulations laid out by the FCA and MAR.

2. Purpose

The purpose of this policy is to provide the company’s intent and approach with regards to Market abuse and how we comply with the relevant regulations, laws and guidelines. It is also a reference document for staff and associates to ensure their understanding and compliance with both internal and external requirements. This document has been updated to comply with the Market Abuse Regulations (EU) 596/2014 which came into effect of 3rd July 2016 and as such all associated documents and training materials have also been reviewed and updated.

We maintain a transparent and open workplace where all staff are encouraged to report any suspicions or concerns to a Manager or designated person without fear of recrimination or further consequences. Market abuse is not accepted or tolerated within the company and our objectives and aims set out how we mitigate against and comply with the MAR.

It is the aim of the company to work in accordance with the Market Abuse Regulations and alongside the FCA in the effort to prevent, detect and punish market abuse and to this end we operate in a transparent and ethical manner with all clients and at all times.

3. Scope

This policy applies in full to the company and its staff (meaning permanent, fixed term, and temporary staff, any third-party representatives or sub-contractors, agency workers, volunteers, interns and agents engaged with the company in the UK or overseas). Any member of staff who does not follow this policy and any associated procedures will be subject to disciplinary procedures and possible termination from the company.

4. Definitions

For the purposes of this policy and the associated regulations, the following definitions apply:

  • Financial Instrument – means those instruments specified below:
    1. Transferable securities
    2. Money-market instruments
    3. Units in collective investment undertakings
    4. Options, futures, swaps, forward rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, emission allowances or other derivatives instruments, financial indices or financial measures which may be settled physically or in cash
    5. Options, futures, swaps, forwards and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the party’s other than by reason of default or other termination event
    6. Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market, a MTF, or an OTF, except for wholesale energy products traded on an OTF that must be physically settled
    7. Options, futures, swaps, forwards and any other derivative contracts relating to commodities, that can be physically settled not otherwise mentioned in point 6 of this Section and not being for commercial purposes, which have the characteristics of other derivative financial instruments
    8. Derivative instruments for the transfer of credit risk
    9. Financial contracts for differences
    10. Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables freight rates or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties other than by reason of default or other termination event, as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market, OTF, or an MTF
    11. Emission allowances consisting of any units recognised for compliance with the requirements of Directive 2003/87/EC (Emissions Trading Scheme)
  • Investment Services & Activities – means those listed below:
    1. Reception and transmission of orders in relation to one or more financial instruments
    2. Execution of orders on behalf of clients
    3. Dealing on own account
    4. Portfolio management
    5. Investment advice
    6. Underwriting and/or placing of financial instruments on a firm commitment basis
    7. Placing of financial instruments without a firm commitment basis
    8. Operation of an MTF
    9. Operation of an OTF
  • Investment Firm – means any legal person whose regular occupation or business is the provision of one or more investment services to third parties and/or the performance of one or more investment activities on a professional basis.
  • FCA – Financial Conduct Authority (competent authority)
  • MAR – Market Abuse Regulations (EU) 2014/596/EU
  • MAD – Market Abuse Directive 2014/65/EU
  • Investment Advice – means the provision of personal recommendations to a client, either upon its request or at the initiative of the investment firm, in respect of one or more transactions relating to financial instruments
  • Dealing on own Account – means trading against proprietary capital resulting in the conclusion of transactions in one or more financial instruments
  • Market Maker – means a person who holds himself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against that person’s proprietary capital at prices defined by that person
  • Client – means any natural or legal person to whom an investment firm provides investment or ancillary services
  • Limit Order – means an order to buy or sell a financial instrument at its specified price limit or better and for a specified size
  • Money Market Instruments – means those classes of instruments which are normally dealt in on the money market, such as treasury bills, certificates of deposit and commercial papers and excluding instruments of payment
  • Systematic Internaliser – means an investment firm which, on an organised, frequent systematic and substantial basis, deals on own account when executing client orders outside a regulated market, an MTF or an OTF without operating a multilateral system
  • Multilateral Trading Facility – or ‘MTF’ means a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments – in the system and in accordance with non-discretionary rules – in a way that results in a contract
  • Organised Trading Facility – or ‘OTF’ means a multilateral system which is not a regulated market or an MTF and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in a way that results in a contract
  • Trading Venue – means a regulated market, an MTF or an OTF
  • Competent Authority – means the authority, designated by each Member State in accordance with Article 22 of the MAR
  • Spot Commodity Contract – means a contract for the supply of a commodity traded on a spot market which is promptly delivered when the transaction is settled, and a contract for the supply of a commodity that is not a financial instrument, including a physically settled forward contract
  • Spot Market – means a commodity market in which commodities are sold for cash and promptly delivered when the transaction is settled, and other non-financial markets, such as forward markets for commodities
  • Issuer – means a legal entity governed by private or public law, which issues or proposes to issue financial instruments, the issuer being, in case of depository receipts representing financial instruments, the issuer of the financial instrument represented
  • Disclosing Market Participant – means a person who falls into any of the categories set out below and discloses information in the course of a market sounding:
    1. an issuer
    2. a secondary offeror of a financial instrument, 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
    3. an emission allowance market participant; or
    4. a third party acting on behalf or on the account of a person referred to in point (a), (b) or (c)
    5. 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, shall also constitute a market sounding, provided that:
      1. the information is necessary to enable the parties entitled to the securities to form an opinion on their willingness to offer their securities; and
      2. 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.

5. Market Abuse and the Regulations

Market Abuse is defined as certain types of unlawful and/or unwanted behaviour that affects the integrity of financial markets. Such behaviour includes (but is not limited to) insider dealing and market manipulation. Laws and regulations for combatting and preventing market abuse were initially laid out in 2003 under the EU Market Abuse Directive (MAD), MAD sought to implement an EU-wide market abuse regime, however after a scheduled review it was determined that a newer, more structured regime was needed due to the increasingly global nature of financial markets and the development of new trading platforms.

In 2014 the Market Abuse Regulation (MAR) and the Directive on Criminal Sanctions for Market Abuse (CSMAD) were published in the Official Journal with each having an implementation date of 3rd July 2016. MAR intends to enhance and harmonise the EU regime on market abuse, providing confidence in market integrity, increasing accountability whilst reducing regulatory complexity.

The Market Abuse Regulations (EU) apply to: –

  • Any firm or individual who directly or indirectly deals in, or any firm who issues, any financial instrument (FI) that is:
    • admitted to trading on a regulated market or for which a request for admission to trading has been made
    • traded on a Multilateral Trading Facility (MTF), admitted to trading on an MTF or for which a request for admission to trading on an MTF has been made
    • traded on an Organised Trading Facility (OTF) (from MiFID II’s applicability)
    • not admitted to trading on one of those venues, but the price or value of which depends on or has an effect on the price or value of an FI

6. Objectives

It is the company’s aim to ensure that: –

  • All staff are made aware of the Market Abuse Regulations and FCA MAR sourcebook content and have access to this policy and other associated documents at all times
  • Staff are provided with extensive and detailed training on market abuse, including specifically inside information, market manipulation and the disclosure and reporting requirements
  • We prevent against, detect, identify and report any and all suspicions of market abuse
  • We shall establish and maintain effective arrangements, systems and procedures aimed at preventing and detecting insider dealing, market manipulation and attempted insider dealing and market manipulation
  • We disclosure and declare inside information immediately in accordance with Article 7 and 17 of the MAR and always with the public’s best interests in mind
  • Where we delay the disclosure of any inside information, it is done so only once all conditions of MAR Article 17(4) and Article 17(5) have been met
  • We have structured and robust safeguards in place to identify and reduce the risk of market abuse and other financial crimes
  • Staff are made aware of reporting lines (i.e. Compliance Officer, HR Manager), as well as the reporting obligations to regulators and the public
  • Staff are made aware that any false or malicious reports will be penalised by the firm and disciplinary action will be taken
  • Ensure that Persons discharging managerial responsibilities (PDMRs) notify the issuer and the FCA of certain transactions (once the total amount of EUR 5,000 has been reached within a calendar year) in or related to the issuer’s financial instruments conducted on their own account
  • Where applicable, we will maintain an insider list for internal reference and submission to the FCA should it be requested
  • The reporting and disclosure of any suspicious transactions or orders to the FCA via a STOR
  • This policy is to be read and used alongside the: –
  • Anti-Bribery & Corruption Policy
  • Financial Crime & Anti-Money Laundering Policy & Procedures
  • Whistleblowing Policy
  • To maintain strict and robust controls and procedures to detect and report any suspicious activity
  • Ensure frequent risk assessment and audits of all due diligence and market abuse identification controls and systems
  • Maintain logs and reporting records of all: –
    • Inside Information Disclosures
    • Suspicious Transactions and/or Orders
    • Delayed Disclosure Notifications
    • PDMR Notifications
  • [Add further objectives & aims as applicable to your firm and obligations]

7. Inside Information

Inside Information can amount to a form of market abuse if used or undisclosed as per the laws and regulations laid out in the Market Abuse Regulations (EU) 596/2014 and the FCA’s MAR Sourcebook. the company have a strict and robust approach to obtaining, using and disclosing such information, of which all employees are aware of and consistently provided in-house training in.

As per Article 7(1) of MAR, the company defines Inside Information as comprising of the following types of information: –

  • Information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments
  • In relation to commodity derivatives, information of a precise nature, which has not been made public, relating, directly or indirectly to one or more such derivatives or relating directly to the related spot commodity contract, and which, if it were made public, would be likely to have a significant effect on the prices of such derivatives or related spot commodity contracts, and where this is information which is reasonably expected to be disclosed or is required to be disclosed in accordance with legal or regulatory provisions at the Union or national level, market rules, contract, practice or custom, on the relevant commodity derivatives markets or spot markets
  • In relation to emission allowances or auctioned products based thereon, information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more such instruments, and which, if it were made public, would be likely to have a significant effect on the prices of such instruments or on the prices of related derivative financial instruments
  • For persons charged with the execution of orders concerning financial instruments, it also means information conveyed by a client and relating to the client’s pending orders in financial instruments, which is of a precise nature, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments, the price of related spot commodity contracts, or on the price of related derivative financial instruments.

[Please refer to the ESMA issued guidelines for a non-exhaustive indicative list of information which is reasonably expected or is required to be disclosed in accordance with the legal and/or regulatory provisions.]

7.1 Disclosure of Inside Information

The company confirms that where applicable to Article 7 and 17 of the MAR, we will: –

  • Always inform the public as soon as possible of any inside information which directly concerns us
  • Ensure that the inside information is made public in a manner which enables fast access and complete, correct and timely assessment of the information by the public
  • Never combine the disclosure of inside information to the public with the marketing or promotion of our activities
  • Always post and maintain on our website for a period of at least five years, all inside information that we are required to disclose publicly.
  • [Delete if not applicable] As an emission allowance market participant, publicly, effectively and in a timely manner, disclose any and all inside information concerning emission allowances which we hold in respect of our business, including aviation activities (Annex I to Directive 2003/87/EC) or installations (Article 3(e) of the same Directive) which the participant concerned, or its parent undertaking or related undertaking, owns or controls

7.2 Delaying Disclosure of Inside Information

Where the company has obtained or becomes aware of any inside information, we will always announce and disclose such information immediately as per the MAR requirements; unless we or the information meets all the specific conditions as outlined by MAR Article 17(4).

On the company’s own responsibility and as per the conditions outlined by MAR, we may delay disclosure to the public of inside information providing that all the following conditions are met: –

  1. Immediate disclosure is likely to prejudice our legitimate interests
  2. The delay of disclosure is not likely to mislead the public
  3. We are able to ensure the confidentiality of any such information

[Delete below paragraph if not applicable]

As the company operates and trades as a credit institution or a financial institution and in order to preserve the stability of the financial system, we may on our own responsibility, also delay the public disclosure of inside information, including information which is related to a temporary liquidity problem and, in particular, the need to receive temporary liquidity assistance from a central bank or lender of last resort, provided that all of the following conditions are met: –

  1. The disclosure of the inside information entails a risk of undermining the company’s financial stability and of the financial system
  2. It is in the public interest to delay the disclosure
  3. The confidentiality of that information can be ensured
  4. The named competent authority has consented to the delay on the basis that the conditions in points (a), (b) and (c) are met

Where we have delayed disclosing inside information in accordance with MAR Article 17(4), we will always notify the FCA of the delay immediately following public disclosure of the information. This notification will be done using the FCA’s Delayed disclosure of inside information notification form. Any such notification will also be accompanied by a written explanation of the delayed disclosure, the information involved and how each of the conditions were met.

7.3 Use of Holding Announcements

As per clause 2.2.9 of the FCA’s Disclosure & Transparency Rules (DTR), in any instance where the company are faced with an unexpected and significant event, a short delay may be acceptable if it is necessary to clarify a/the situation. In such events, we will always use a ‘Holding Announcement’ where we believe that there is a danger of inside information leaking before the facts and their impact can be confirmed.

Any use of such an announcement will always: –

  • Detail as much of the subject matter as possible
  • Set out the reasons why a fuller announcement cannot be made
  • Include an undertaking to announce further details as soon as possible

All such announcements, including content, position and timings will be affected in consultation with the FCA.

7.4 Insider Lists

[You are required under MAR to keep a structured, electronic format for your Insider List, which KYC have provided a template for with this document based on the standards and requirements outlined by the ESMA’s Technical Standards p306-311.]

MAR and the FCA places an obligation on issuers and EAMPs to draw-up and maintain a list of all those persons working for them that have access to inside information. With regards to this the company keeps and maintains such a list which is located [insert reference or location of your Insider List]. The company endeavour to: –

  • Draw up a list of all persons who have access to inside information and who are working for us under a contract of employment, or otherwise performing tasks through which they have access to inside information (including 3rd parties such as advisers, accountants or credit rating agencies)
  • Provide the insider list to the competent authority (FCA) as soon as possible upon its request
  • Take all reasonable steps to ensure that any person on the insider list acknowledges in writing the legal and regulatory duties entailed and is aware of the sanctions applicable to insider dealing and unlawful disclosure of inside information
  • Ensure that where another person acting on our behalf assumes the task of drawing up and updating the insider list:
    • we still remain fully responsible for complying with Article 18 of MAR
    • we shall always retain a right of access to the insider list
  • Ensure that the insider list includes at the very least:
    • the identity of any person having access to inside information
    • the reason for including that person in the insider list
    • the date and time at which that person obtained access to inside information
    • the date on which the insider list was drawn up
  • Promptly update the insider list and record the date and time of any such update in the following circumstances:
    • where there is a change in the reason for including a person already on the insider list
    • where there is a new person who has access to inside information and needs, therefore, to be added to the insider list
    • where a person ceases to have access to inside information
  • Retain the insider list for a period of at least five years after it is drawn up or updated

Where it is applicable that the company’s financial instruments are admitted to trading on an SME growth market, we acknowledge that we shall be exempt from drawing up and maintaining an insider list, only where the following conditions are met: –

  • We have taken all reasonable steps to ensure that any person with access to inside information acknowledges the legal and regulatory duties entailed and is aware of the sanctions applicable to insider dealing and unlawful disclosure of inside information; and
  • We are able to provide the competent authority (FCA), upon request, with an insider list.

7.5 Unlawful Disclosure

As per the regulations under Articles 10 and 14 of the MAR, we operate strict controls and measures to prevent the unlawful disclosure of inside information. Such unlawful disclosure can arise when a person possesses inside information and discloses that information to any other person, except where the disclosure is made in the normal exercise of an employment, a profession or duties.

The onward disclosure of recommendations or inducements referred to in the MAR Article 8(2) amounts to unlawful disclosure of inside information under this Article where the person disclosing the recommendation or inducement knows or ought to know that it was based on inside information. As a firm, we wholly reject the unlawful disclosure of information and will seek the highest and toughest penalties where any employee or associated persons are found to be engaged in such activities.

Under our employee and associated persons’ expectations, a person shall not: –

  • Engage or attempt to engage in insider dealing
  • Recommend that another person engage in insider dealing or induce another person to engage in insider dealing
  • Unlawfully disclose inside information

7.6 Insider Dealing

For the purposes of this policy and in accordance with the Market Abuse Regulations, the company defines financial insider dealing as a person possessing inside information who uses that information by acquiring or disposing of, for their own account or for the account of a third party, directly or indirectly, financial instruments to which that information relates. The use of inside information by cancelling or amending an order concerning a financial instrument to which the information relates where the order was placed before the person concerned possessed the inside information, is also considered to be insider dealing.

The company and the MAR also view recommending that another person engage in insider dealing, or inducing another person to engage in insider dealing, as unlawful and a strict breach in regulatory compliance. For the purpose of this policy and for employee clarification, we define such an inducement as arising where the person possesses inside information and: –

  1. Recommends, on the basis of that information, that another person acquire or dispose of financial instruments to which that information relates, or induces that person to make such an acquisition or disposal
  2. Recommends, on the basis of that information, that another person cancel or amend an order concerning a financial instrument to which that information relates or induces that person to make such a cancellation or amendment.

The rules and regulations regarding insider dealing and/or the recommendation or inducement of another person to engage in insider dealing applies to any person who possesses inside information as a result of: –

  • being a member of the administrative, management or supervisory bodies of the issuer or emission allowance market participant
  • having a holding in the capital of the issuer or emission allowance market participant
  • having access to the information through the exercise of an employment, profession or duties
  • being involved in criminal activities

8. Market Soundings

A Market Sounding is a communication of information, before the announcement of a transaction, which is aimed at gauging the interest of potential investors in a possible transaction and the conditions relating to it such as its potential size or pricing. the company understands that under Article 11(4) of MAR, when a “disclosing market participant” (DMP) discloses inside information to a person receiving the market sounding (MSR) in the course of a market sounding in accordance with the conditions in Article 11(3) and (5) of those same regulations, this should be deemed to have been made in the normal course of the exercise of a person’s employment, profession or duty, and therefore not to constitute market abuse.

Where the company are involved in any market sounding activities, we abide by the regulations set out in Article 11 of the MAR.

Our measures and controls for transparent and compliant market soundings includes: –

  • We have a nominated initial point of contact for all market soundings who is independent of any persons who may be involved in orders or transactions of which the information being received relates to
  • Prior to any market sounding taking place, the company makes an assessment and records any such findings as to whether any inside information will be disclosed. A written record of these findings is maintained and kept for 5 years after the initial assessment date
  • Where persons have received information, and will be involved in transactions after the market sounding, an independent assessment of such information is carried out and logged to assess it against the inside information criteria
  • Policy sharing with all 3rd parties and counterparties to ensure that they are aware of our market sounding measures and only provide information via the independent contact
  • Establishing a ‘Need to Know’ basis for all information obtained via a market sounding so that only pre-defined dissemination and reporting lines are adhered to
  • Documenting all topics discussed during any relevant meetings between persons or entities where the potential for inside information to be disclosed is a risk
  • Dedicated staff training for those involved in market soundings and those carrying out any independent gathering or assessments of information in relation to a market sounding
  • Reminder prompts of what criteria constitutes ‘Inside Information’ so that all staff are constantly aware of the regulations and their obligations
  • In relation to each market sounding conducted, we record:
    • the names of all natural and legal persons to whom information has been disclosed in the course of the market sounding
    • the date and time of each communication of information which has taken place in the course of or following the market sounding
    • the contact details of the potential investors used for the purposes of the market sounding

[Ensure that you either have controls in place for implementing the above measures or you replace these suggestions with your own procedures.]

8.1 Nominated Point of Contact

 

NAME:                        __________________________________________

POSITION:                  __________________________________________

ADDRESS:                  __________________________________________

                                    __________________________________________

                                    __________________________________________

EMAIL:                        _____________________

TEL:                            _____________________

 

8.2 Deputy Point of Contact

NAME:                        __________________________________________

POSITION:                  __________________________________________

ADDRESS:                  __________________________________________

                                    __________________________________________

                                    __________________________________________

EMAIL:                        _____________________

TEL:                            _____________________

9. Market Manipulation

For the purposes of this policy and any associated procedures and internal obligations, the company defines market manipulation as comprising of the following activities: –

  • Entering into 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, demand for, or price of, a financial instrument, a related spot commodity contract or an auctioned product based on emission allowances
    • secures, or is likely to secure, the price of one or several financial instruments, a related spot commodity contract or an auctioned product based on emission allowances at an abnormal or artificial level
  • Entering into a transaction, placing an order to trade or any other activity or behaviour which affects or is likely to affect the price of one or several financial instruments, a related spot commodity contract or an auctioned product based on emission allowances, which employs a fictitious device or any other form of deception or contrivance
  • Disseminating information through the media, including the internet, or by any other means, which gives, or is likely to give, false or misleading signals as to the supply of, demand for, or price of, a financial instrument, a related spot commodity contract or an auctioned product based on emission allowances or secures, or is likely to secure, the price of one or several financial instruments, a related spot commodity contract or an auctioned product based on emission allowances at an abnormal or artificial level, including the dissemination of rumours, where the person who made the dissemination knew, or ought to have known, that the information was false or misleading
  • Transmitting false or misleading information or providing false or misleading inputs in relation to a benchmark where the person who made the transmission or provided the input knew or ought to have known that it was false or misleading, or any other behaviour which manipulates the calculation of a benchmark
  • The conduct by a person, or persons acting in collaboration, to secure a dominant position over the supply of or demand for a financial instrument, related spot commodity contracts or auctioned products based on emission allowances which has, or is likely to have, the effect of fixing, directly or indirectly, purchase or sale prices or creates, or is likely to create, other unfair trading conditions
  • The buying or selling of financial instruments, at the opening or closing of the market, which has or is likely to have the effect of misleading investors acting on the basis of the prices displayed, including the opening or closing prices
  • The placing of orders to a trading venue, including any cancellation or modification thereof, by any available means of trading, including by electronic means, such as algorithmic and high-frequency trading strategies, and which has one of the effects referred to in points 1 and 2 by:
    • disrupting or delaying the functioning of the trading system of the trading venue or being likely to do so
    • making it more difficult for other persons to identify genuine orders on the trading system of the trading venue or being likely to do so, including by entering orders which result in the overloading or destabilisation of the order book
    • creating or being likely to create a false or misleading signal about the supply of, or demand for, or price of, a financial instrument, in particular by entering orders to initiate or exacerbate a trend
  • The taking advantage of occasional or regular access to the traditional or electronic media by voicing an opinion about a financial instrument, related spot commodity contract or an auctioned product based on emission allowances (or indirectly about its issuer) while having previously taken positions on that financial instrument, a related spot commodity contract or an auctioned product based on emission allowances and profiting subsequently from the impact of the opinions voiced on the price of that instrument, related spot commodity contract or an auctioned product based on emission allowances, without having simultaneously disclosed that conflict of interest to the public in a proper and effective way
  • The buying or selling on the secondary market of emission allowances or related derivatives prior to the auction held pursuant to Regulation (EU) No 1031/2010 with the effect of fixing the auction clearing price for the auctioned products at an abnormal or artificial level or misleading bidders bidding in the auctions

The company operates a strict environment and workplace which does not accept or allow market manipulation in any form. Staff are provided with comprehensive training workshops on the criteria for being considered a manipulation of the market and all transactions, orders and statements are assessed, reviewed and monitored on a consistent and continual basis to prevent and detect manipulations before they can occur.

We understand that any manipulation of the market can mislead others into making the wrong investment decisions and we have an obligation as well as a duty of care to ensure that that does not happen. We also understand and convey to all staff that market manipulations can also include: –

  • Making false or misleading statements and completing transactions that have the purpose of giving a false impression about supply or demand
  • The dissemination of information that when given or spreads gives a false or misleading impression about an investment, which in turn can artificially increases or decreases the stock price.

10. Prevention & Detection of Market Abuse

[Owing to the vast differentiation in firm types who are subject to the MAR, the regulations themselves, the FCA and the ESMA standards give generic guidance on the systems and controls that can/should be used for the prevention and detection of market abuse, however it is necessary for each firm to create, implement and specify their own procedures below for compliance with MAR.]

Such procedures and detection methods can include: –

  • Automated surveillance
  • Data Analysis (internal or outsourced)
  • Transaction analysis and audits
  • Monitoring and identification procedures
  • Order book data analysis
  • Mix of automated and human checking systems
  • Document, recall and review STOR’s
  • Pattern analysis and detection
  • Effective and comprehensive training
  • Dedicated surveillance team

11. Reporting Requirements

The company understand that as a [insert firm type] firm, we have a legal and regulatory obligation to establish and maintain effective arrangements, systems and procedures aimed at preventing and detecting insider dealing, market manipulation and attempted insider dealing and market manipulation. This includes strict and robust procedures and controls for reporting orders and transactions, including any cancellation or modification thereof, that could constitute insider dealing, market manipulation or attempted insider dealing or market manipulation.

11.1 Suspicious Transaction and Order Reports (STORs)

As a firm who arranges and/or executes transactions in certain financial instruments and/or the operators of a trading venue, the company has an obligation to report any and all suspicious transactions and orders (STORs) to the FCA with immediate effect. For the purposes of clarification in this policy, we defined a suspicious transaction or order as one where we have any ‘reasonable grounds’ to suspect that it might constitute market abuse. We define market abuse as insider dealing, market manipulation, the provision of inside information and any other form of abuse as defined by the Market Abuse Regulations (EU) 596/2014.

All staff, but with specific emphasis on those who are responsible for managing financial crime risks and our compliance officer/s, are provided with effective training to identify potentially suspicious transactions and orders and are given clear reporting lines and procedures for the internal and external reporting of any STOR.

Our reporting of any suspicion includes both transactions and orders as well as any attempts at market abuse. These reports are separate to those defined and outlined on our Financial Crime and Money Laundering Policy & Procedure document, which fall under the Suspicious Activity Reports (SARs) are governed by the Proceeds of Crime Act 2002 and the Terrorism Act 2000 with specific reporting being via The National Crime Agency (please see our AML Policy & Procedure for further information).

11.1.1 STOR Reporting Template

Where any suspicious transaction or order is made, all staff are trained to log such an incident on our Suspicious Transaction or Order Report Form which has been created using the ESMA template guidelines derived from SUP 15.10 of the FCA Handbook and under MAR.

This form is used to log all attempted, suspected and actual instances of market abuse as defined by this policy, copies of which are retained for 5 years after the initial creation date. The information is also used for submission to the FCA under the same above-mentioned regulations.

11.1.2 STOR Submission

Once an internal STOR form has been completed, all such information is then reported within the required timeframe to the FCA via their STOR reporting methods as below: –

  • Nominated employee logs in to the FCA Connect system
  • STOR form is completed in full using the internal incident form details and includes the basis for reporting the suspicious transaction and all other relevant information
  • The form is then submitted, and the date, time and employee name are logged on the incident form for future reference

Further assistance when completing a STOR can be obtained from the FCA STOR helpline on 020 7066 5577 or email storhelp@fca.org.uk.

11.2 Persons Discharging Managerial Responsibilities (PDMRs) Notifications

Persons discharging managerial responsibilities (PDMRs) and persons closely associated with them are required, under MAR Article 19, to notify the issuer and the FCA of certain transactions in or related to the issuer’s financial instruments conducted on their own account. This applies to transactions once the total amount of EUR 5,000 has been reached within a calendar year. Such notifications shall be made promptly and no later than three business days after the date of the transaction.

[You are required under MAR to keep a record of all PDMA notifications that are submitted and are guided by the regulations to use a structured and detailed template, a sample of which can be viewed in the ESMA’s Technical Standards p316.]

12. Responsibilities

It is the responsibility of all managers to ensure that this policy is disseminated to and understood by all staff and that the supplementing procedures and reporting lines are also made clear and are available for reference at all times.

All staff are expected to comply with the Market Abuse Regulations and any related FCA rules as well as adhering to their obligations under our own internal policy and procedures; failure to do so may lead to disciplinary action being taken.