Market Abuse

Question 1

What does MAD deal with?

Answer 1

Market abuse, insider dealing, market manipulation (ops based and info based), information disclosure

Question 2

Disclosure requirement

Answer 2

issuer shall inform public asap of inside information which directly concerns said issuer

shall ensure that inside info is made public in a manner which enables fast access and complete correct bla bla

dont combine disclosure of inside info with amrketing

Question 3

Inside info definition

Answer 3

info of precise nature that has not been made public which would have significant effect on price

Question 4

When is info specific enough to allow a conclusion on price?

Answer 4

1) allows investor to invest with very low risk and maike gain

OR

2) If the info is such that it is likely to be exploited immediately on the market

Question 5

When can an issuer that is a CI/FI delay the public disclosure?

Answer 5

ALL of this is met:

1) disclosure entails risk for financial stability of issuer or system
2) it is in public interest to delay
3) confidentiality can be ensured
4) compotent authority has consented to delay

Question 6

When can generally be delayed (the disclosure)?

Answer 6

ALL of this must be met:

1) immediate disclosure will prejudice legitimate interests of issuer
2) delay wouldnt mislead public
3) issuer can ensure confidentiality

if market rumour -> should disclose asap

Question 7

When could legitimate interest of issuer be prejudiced?

Answer 7

1) issuer is conducting negotiations that would be jeopardized if disclosure happens
2) Financial viability of issuer is in grave danger
3) inside info relates to decisions taken which need the approval of another body (such as board)

Question 8

When is delay of disclosure likely to mislead public?

Answer 8

1) if info is different from previous public announcement
2) if it regards issuer not meeting financial objectives
3) if it is in contrast with market expectations (which are based on previous issuer signals)

Question 9

Selective disclosure

Answer 9

issuer must make public disclosure if they disclose to third party (simultaneously if intentional dsiclosure, promptly if non-intentionak)

UNLESS: NDA with third party

Question 10

Cancelling or amending order on inside info -> insider trading?

Answer 10

yes

Question 11

Market sounding

Answer 11

legitimate transmission of inside information to gauge sentiment.
Consequence for person receiving sounding: cannot use that info, cannot disclose

Question 12

Necessary cautions for market sounding

Answer 12

1) should consider if inside info disclosure is involved
2) make written record of conclusion
3) obtain consent of person receiving sounding “wall crossing”
4) make record of all info given

Question 13

Operation based manipulation definition

Answer 13

transactions/orders which give false or misleading signals, e.g. to fix the price, create unfair trading conditions or trading at opening/closing with misleading consequences

Question 14

Information based dissmeiation

Answer 14

giving info in media with false/misleading signals. taking advantage of voice in media with previously taking position

Question 15

When are buyback programmes not market manipulation?

Answer 15

Sole purpose of:

1) reduce capital of an issuer
2) meet obligations arising from convertibles
3) meet obligations arising from share option programmes etc.

plus: full details disclosed, reported, limit in price and volume, RTS

Question 16

When is stabilisation not market manipulation?

Answer 16

1) limited period
2) info disclosed, notified
3) limits
4) complies with bla