Tackling market abuse: one year on

On 1 December 2001 (N2), the Financial Services and Markets Act 2000 introduced a new financial penalties regime to challenge market abuse (Part VIII of the Act). This required the FSA to publish a code of guidance on whether or not certain behaviours, in the FSA’s opinion, amount or do not amount to market abuse. The Code of Market Conduct (the Code – see chapter 1 of the FSA’s Market Conduct Sourcebook [MAR]) was implemented at N2 yet, observes Michelle Stennett of Denton Wilde Sapte, despite the extensive consultations that took place prior to the implementation of the new regime, the FSA’s work does not appear to be over.

Michelle Stennett is a solicitor in the Financial Markets and Regulation Group at Denton Wilde Sapte. Michelle can be contacted on 020 7246 7258 (mns@dentonwildesapte.com).

Since N2, the FSA’s major challenge continues to be ensuring its Code strikes a balance between too much prescription and too little detail. The FSA’s approach must be flexible to handle new forms of market abuse as and when they arise in what are rapidly evolving markets, so much of the current Code is quite general.