MAR 1.3 5Insider dealing6Descriptions of behaviour that amount to insider dealing5MAR 1.3.2G03/07/2016RP Show
The following are examples of behaviour that may amount to insider dealing under the Market Abuse Regulation, but are not intended to form an exhaustive list:5
Factors to be taken into account: "on the basis of"5[Note: article 9 of the Market Abuse Regulation] 5[Note: article 9(1)(a) of the Market Abuse Regulation] 5Relevant factors: legitimate business of market makers5[Note: article 9(5) of the Market Abuse Regulation] MAR 1.3.10G03/07/2016RP The5 following factors may5be taken into account in determining whether or not a person'sbehaviour5 is in pursuit of legitimate business, and are indications that it is:
5[Note: article 9 of the Market Abuse Regulation] 5Relevant factors: execution of client orders5[Note: article 9 of the Market Abuse Regulation] 5[Note: article 9 of the Market Abuse Regulation] MAR 1.3.15G03/07/2016RP The5following factors may5 be taken into account in determining whether or not a person'sbehaviour in executing5 an order (including an order relating to a bid)41 on behalf of another is carried out legitimately in the normal course of exercise of that person’s employment, profession or duties5, and are indications that it is:
5Descriptions of behaviour that do not indicate insider dealing and relevant factors: takeover and merger activityMAR 1.3.17G03/07/2016RP 5With reference to article 9(4) of the Market Abuse Regulation, examples of using inside information solely for the purpose of proceeding with a merger or public takeover may include:
MAR 1.3.19G03/07/2016RP The5following factor may5be taken into account in determining whether or not a person'sbehaviour5is for the purpose of him proceeding with5a merger with the target company or a public takeover of the target company5, and is an indication5 that it is:
5Examples of insider dealingMAR 1.3.20G03/07/2016RP The following descriptions are intended to assist in understanding certain behaviours which may constitute insider dealing under the Market Abuse Regulation and5 concern the definition of inside information relating to financial instruments other than commodity derivatives or emissions allowances or auctioned products based thereon:5
MAR 1.3.21G23/06/2017RP The following description is intended to assist in understanding certain behaviours which may constitute insider dealing under the Market Abuse Regulation and5 concerns the definition of inside information relating to commodity derivatives. Before the official publication of LME stock levels, a metals trader learns (from an insider) that there has been a significant decrease in the level of LME aluminium stocks. This information is reasonably expected to be disclosed in accordance with market practice or custom on the LME7. The trader buys a substantial number of futures in that metal on the LME, based upon his knowledge of the significant decrease in aluminium stock levels. 5 MAR 1.3.22G03/07/2016RP The following description is intended to assist in understanding certain behaviours which may constitute insider dealing under the Market Abuse Regulation and5concerns the definition of inside information relating to pending client orders. A dealer on the trading desk of a firm dealing in oil derivatives accepts a very large order from a client to acquire a long position in oil futures deliverable in a particular month. Before executing the order, the dealer trades for the firm and on his personal account by taking a long position in those oil futures, based on the expectation that he will be able to sell them at profit due to the significant price increase that will result from the execution of his client's order. Both trades could constitute insider dealing5. MAR 1.3.23G01/01/2021RP The following connected descriptions are intended to assist in understanding certain behaviours which may constitute insider dealing under the Market Abuse Regulation and concern5 the differences in the definition of inside information for commodity derivatives and for other financial instruments.
MAR 1.3.24G01/01/2021RP 7 ESMA has issued guidelines under article 7(5) of the Market Abuse Regulation which relate to the definition of inside information in the context of commodity derivatives. [Note: ESMA guidelines: Information relating to commodity derivatives markets or related spot markets for the purpose of the definition of inside information on commodity derivatives, 17 January 2017/ESMA/2016/1480 (EN)8.] What is frontFront-running is illegal and unethical when a trader acts on inside information. A straightforward example of front-running occurs when a broker exploits market-moving knowledge that has not yet been made public. There are gray areas. An investor may buy or sell a stock and then publicize the reasoning behind it.
What is frontFront running is the illegal practice of purchasing a security based on advance non-public information regarding an expected large transaction that will affect the price of a security.
Is frontThe concept of front-running is very similar to insider trading as in both of them, an insider is involved, however, in front-running, the insider takes advantage of the information he/she has regarding any future transaction and such person uses such information for personal gains.
What is frontFront-running is a market malpractice where a dealer, trader or fund manager who is aware of a large upcoming share purchase order buys the same share in advance in bulk. Such bulk orders drive up share price.
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