Seminar 6
Week 6
Administrative issues
Essay issues:
6000 words
Focus on key issues- do not try and cover everything!!!! 3 to 4 key points at the most- what
are the key points or issues- this will allow you to get depth over breadth
Analysis and critical thinking- show what the law is- you understand the law. This is the law
however, there are these issues with the law and this is how I will deal with these issues.
When you stating how you would deal with this, state your thoughts- its almost like giving
advice to a client. Take a stance on certain controversies and state why you side with your
view.
Must engage with primary source! This is vital!!!!
Insider Dealing and Market Abuse
MAR changes the law on market abuse substantially. It has been incorporated into the FSMA 2000 (it
is a framework document and you need to refer back to the regulations). MAR is virtual
harmonisation in relation to market abuse.
Market abuse comprises of insider dealing and market manipulation (seeking to create a false
market). We will mainly focus with these in relation to shares only. Our primary focus is on insider
dealing (using information that is not publicly available to purchase or sell shares for your
advantage). CJA defines insider dealing with some sort of circularity.
MAD2 opted out of by UK, as it imposes criminal sanctions, whilst MAR imposes civil sanctions. Eg.
S206 of FSMA we have financial penalties (difference between fine and penalty – economically none-
but a fine carries with it the status of criminality- penalties are civil sanctions.) Under CJA insider
dealing is a criminal offence. Under FISMA insider dealing is a civil wrong so there can be things like
naming and shaming, restitution orders (get back gains). This is a dual regime i.e. criminal and civil.
The body that deals with market abuse is the Financial Conduct Authority (FCA). Issues guidance on
market abuse via its handbook (it has a power to issue these handbooks by statute). The market
conduct handbook gives guidance on things it is not happy with if you are engaged in market abuse
activities.
Regulatory authorities in the UK are looking more towards civil sanctions over criminal sanctions for
insider dealing due to the fact that it is easier to prove due to the lower burden of proof. This can be
seen to be against the policy thinking of the EU as per the MAD2 that is a proponent of criminal
sanctions.
There is a line of American scholars that believe that there is nothing wrong with insider dealing
(Berl?)- to them there is a more efficient use of information and gives a more clear picture of the
company, thus use of inside information should not be punished. The normal view is that the use of
Week 6
Administrative issues
Essay issues:
6000 words
Focus on key issues- do not try and cover everything!!!! 3 to 4 key points at the most- what
are the key points or issues- this will allow you to get depth over breadth
Analysis and critical thinking- show what the law is- you understand the law. This is the law
however, there are these issues with the law and this is how I will deal with these issues.
When you stating how you would deal with this, state your thoughts- its almost like giving
advice to a client. Take a stance on certain controversies and state why you side with your
view.
Must engage with primary source! This is vital!!!!
Insider Dealing and Market Abuse
MAR changes the law on market abuse substantially. It has been incorporated into the FSMA 2000 (it
is a framework document and you need to refer back to the regulations). MAR is virtual
harmonisation in relation to market abuse.
Market abuse comprises of insider dealing and market manipulation (seeking to create a false
market). We will mainly focus with these in relation to shares only. Our primary focus is on insider
dealing (using information that is not publicly available to purchase or sell shares for your
advantage). CJA defines insider dealing with some sort of circularity.
MAD2 opted out of by UK, as it imposes criminal sanctions, whilst MAR imposes civil sanctions. Eg.
S206 of FSMA we have financial penalties (difference between fine and penalty – economically none-
but a fine carries with it the status of criminality- penalties are civil sanctions.) Under CJA insider
dealing is a criminal offence. Under FISMA insider dealing is a civil wrong so there can be things like
naming and shaming, restitution orders (get back gains). This is a dual regime i.e. criminal and civil.
The body that deals with market abuse is the Financial Conduct Authority (FCA). Issues guidance on
market abuse via its handbook (it has a power to issue these handbooks by statute). The market
conduct handbook gives guidance on things it is not happy with if you are engaged in market abuse
activities.
Regulatory authorities in the UK are looking more towards civil sanctions over criminal sanctions for
insider dealing due to the fact that it is easier to prove due to the lower burden of proof. This can be
seen to be against the policy thinking of the EU as per the MAD2 that is a proponent of criminal
sanctions.
There is a line of American scholars that believe that there is nothing wrong with insider dealing
(Berl?)- to them there is a more efficient use of information and gives a more clear picture of the
company, thus use of inside information should not be punished. The normal view is that the use of
