Regulation of market misconduct in the United Kingdom

Abstract

Purpose

To introduce and summarize the key features of market‐misconduct‐related offenses in the UK with a particular focus on insider dealing.

Design/methodology/approach

Provides a detailed overview of: the market abuse regime of the UK's financial regulator, the Financial Services Authority (FSA),which implements the EC Market Abuse Directive; other regulatory powers used by the FSA in cases of market misconduct; and relevant criminal law offenses.

Findings

The FSA is given a broad range of powers that enable it to bring criminal or regulatory proceedings in the UK for market misconduct. The FSA's powers have thus far been used primarily within the regulatory framework, but the FSA has said that it will be prepared to pursue certain cases through the criminal courts where behavior justifies criminal rather than regulatory action. Although the two regimes are similar, there are some differences and both regimes must therefore be considered when analyzing compliance requirements or whether market misconduct has occurred.

Originality/value

This paper is an important reference for publicly traded issuers, those who recommend investments or investment strategies, and their advisors where any investment activity is carried on with the UK or involves UK markets.

Citation

Falkner, R. and Gerty, J. (2005), "Regulation of market misconduct in the United Kingdom", Journal of Investment Compliance, Vol. 6 No. 4, pp. 35-53. https://doi.org/10.1108/15285810510701439