CISI Chapter 3 - Associated Legislation
and Questions and Answers 2026-2027
Updated.
UKMAR - Answer EU Market Abuse Regulation - onshored as part of Brexit; enhances existing
criminal and civil liabilities
Civil vs Criminal - Answer Insider dealing and market manipulation; criminal offences, involve
prison time, suspects brought before judge
Market abuse; civil offence, punishment decided by regulator
Insider Dealing - Answer Illegal buying/selling of securities using insider knowledge.
Info must:
- - not be available to general public
- - be price sensitive
- - be precise and specific (not rumours)
Offence covered under CJA 1993 AND regulator has power to pursue under FSMA 2000
Which instruments are covered under Insider Dealing definition? (CJA 1993) - Answer - Bonds
- Shares
- Warrants
- Depository receipts
- Futures (options, CFDs)
NOT covered:
- Commodities/Commodity derivatives
- Currency/Currency derivatives
- Collective Investment Scheme units/shares
General Defences - Answer For dealing/encouraging to deal:
- No advantage expected
- Believed the info was already widely disclosed
- Would have dealt anyways, info did not change decision
, For disclosing insider info:
- Did not expect the recipient to deal
Special Defences - Answer - Market makers ('acting in good faith')
- Market information
- Price stabilisation
General Prohibition - Answer MAR prohibits:
- Manipulating Transactions
- Manipulating Devices
- Dissemination
- Benchmark Manipulation
Manager's Transactions - Answer Issuer's managers must notify issuer & FCA of their own
account transactions (personal investments) relating to their issuers shares, debt instruments or
related derviatives.
Investment Recommendations - Answer Duty of care on recommendation producers (e.g.
Hindenberg Research) to MAINTAIN OBJECTIVITY and DISCLOSE CONFLICTS OF INTEREST.
- - Hindenberg held short positions in Adani which they disclosed before publishing a report
advising that Adani group used fraudulent practices.
POCA 2002 - Answer - Proceeds of Crime Act 2002 (POCA)
- - Specifies the criminal offences of money laundering
Money Laundering - Stages - Answer - Placement
- Layering
- Integration
Money Laundering - Offences - POCA 2000 - Answer PUNISHABLE BY FINE AND UP TO 14 YRS
IN PRISON:
1. Concealing
2. Arrangements - being involved in an arrangement to conceal
3. Acquisition, Use and Possession - applies to all criminal property
and Questions and Answers 2026-2027
Updated.
UKMAR - Answer EU Market Abuse Regulation - onshored as part of Brexit; enhances existing
criminal and civil liabilities
Civil vs Criminal - Answer Insider dealing and market manipulation; criminal offences, involve
prison time, suspects brought before judge
Market abuse; civil offence, punishment decided by regulator
Insider Dealing - Answer Illegal buying/selling of securities using insider knowledge.
Info must:
- - not be available to general public
- - be price sensitive
- - be precise and specific (not rumours)
Offence covered under CJA 1993 AND regulator has power to pursue under FSMA 2000
Which instruments are covered under Insider Dealing definition? (CJA 1993) - Answer - Bonds
- Shares
- Warrants
- Depository receipts
- Futures (options, CFDs)
NOT covered:
- Commodities/Commodity derivatives
- Currency/Currency derivatives
- Collective Investment Scheme units/shares
General Defences - Answer For dealing/encouraging to deal:
- No advantage expected
- Believed the info was already widely disclosed
- Would have dealt anyways, info did not change decision
, For disclosing insider info:
- Did not expect the recipient to deal
Special Defences - Answer - Market makers ('acting in good faith')
- Market information
- Price stabilisation
General Prohibition - Answer MAR prohibits:
- Manipulating Transactions
- Manipulating Devices
- Dissemination
- Benchmark Manipulation
Manager's Transactions - Answer Issuer's managers must notify issuer & FCA of their own
account transactions (personal investments) relating to their issuers shares, debt instruments or
related derviatives.
Investment Recommendations - Answer Duty of care on recommendation producers (e.g.
Hindenberg Research) to MAINTAIN OBJECTIVITY and DISCLOSE CONFLICTS OF INTEREST.
- - Hindenberg held short positions in Adani which they disclosed before publishing a report
advising that Adani group used fraudulent practices.
POCA 2002 - Answer - Proceeds of Crime Act 2002 (POCA)
- - Specifies the criminal offences of money laundering
Money Laundering - Stages - Answer - Placement
- Layering
- Integration
Money Laundering - Offences - POCA 2000 - Answer PUNISHABLE BY FINE AND UP TO 14 YRS
IN PRISON:
1. Concealing
2. Arrangements - being involved in an arrangement to conceal
3. Acquisition, Use and Possession - applies to all criminal property
