5 Market Manipulation

Subject(s):

Misleading impressions — Misleading statements — Market abuse — UK Financial Conduct Authority (FCA)

This chapter discusses market manipulation, the second general type of activity which constitutes market abuse under the Regulation. It covers manipulative behaviour, accepted market practices, indicators of manipulation, and the Financial Conduct Authority (FCA) on market manipulation. Prohibition of both market manipulation, and the brand-new offense of attempted market manipulation, is found in Article 15 of the Regulation, which states: A person shall not engage in or attempt to engage in market manipulation. Market manipulation is a complex category of market abuse that makes difficult to prove, and therefore difficult to punish. Unusual changes to market prices can have many causes. It is not easy to show that any particular change was a result of any particular factor. However, the FCA has other regulatory tools at its disposal to avoid the difficulties that proving ‘market manipulation’ may present.