Hong Kong Court of Final Appeal clarifies “innocent purpose” defence to insider dealing

The Hong Kong Court of Final Appeal (CFA) has recently allowed the Securities and Futures Commission’s (SFC) appeal against the Market Misconduct Tribunal’s (MMT) findings that two former executives of a listed company (ATML), Mr Charles Yiu Hoi Ying and Ms Marian Wong Nam, had not engaged in insider dealing in ATML shares. Continue reading



On 3 July 2016, the EU Market Abuse Regulation (MAR) (EU 596/2014) replaced the Market Abuse Directive (MAD) and the current UK regimes for market abuse and inside information.  To help guide you through the first six months under the new regime, we will be issuing fortnightly "bitesize" updates providing concise snapshots of a number of key practical areas of interest under MAR. This first "bitesize" update on MAR focuses on the impact that MAR will have on listed companies' decisions to delay the disclosure of inside information in the UK.   Continue reading

Market Abuse Update: January 2016

In September, the European Securities and Markets Authority (ESMA) published the final draft of its technical standards for the Market Abuse Regulation (EU MAR), which will replace the current civil regime on 3 July 2016.  EU MAR and the associated Level 2 measures considerably expand the scope of the present regime, introducing more stringent regulation and significant new procedural requirements in a number of key areas. We await publication of the further guidance mandated by EU MAR, and the European Commission's adoption of the Level 2 measures.

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UK: The Davis Review: recommendations for improvement in FCA processes

On 10 December 2014 the FCA published the Davis Review in full together with the FCA’s formal response.   It provides a detailed account and analysis of the events leading up to and immediately after the publication of The Telegraph story about the FCA’s planned life assurance review on 27 March 2014.  On the morning of 28 March 2014, the prices of shares in a number of companies which specialise in pools of potentially affected insurance policies fell substantially. Despite calls by the affected insurance companies, the FCA did not issue an explanatory statement until 2.27 pm on 28 March 2014.  The share prices recovered substantially, but not entirely. Continue reading

Australia: ASIC’s report card on handling confidential information – ‘could do better’

Following the selective briefing of analysts by Newcrest in mid-2013, ASIC announced that it would sit in on communications between companies and analysts during the next reporting season.  Armed with the output of that survey, as well as interviews of listed entities and their advisers engaged in corporate transactions, ASIC has now issued its report on Australian market practice in handling confidential market-sensitive information.  Issuers, analysts and investment banks in the UK will read the findings with some interest, not least since the FCA is launching a thematic review into investment banks’ controls in respect of inside information this year. Continue reading

UK: FSA ups the ante for listed companies with £2.4m fine for LDTR breaches involving inside information

The Financial Services Authority (FSA) has published a final notice setting out its decision to fine Lamprell plc (Lamprell) £2,428,300 for significant failings in its systems and controls which resulted in breaches of the Listing Principles, the Disclosure and Transparency Rules (LDTR) and of the Model Code on directors’ dealings in securities.  This is the first penalty  against an issuer for a breach of the LDTRs, involving delayed release of inside information, to be imposed pursuant to the FSA’s new (March 2010) penalty policy.  The  regulator expects its new approach – which uses a percentage of the issuer’s market capitalisation to calculate the penalty for LDTR breaches involving inside information – will yield significantly higher penalties going forward – larger listed companies, in particular, could face very substantial penalties, akin to US penalty levels.

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Hong Kong: New statutory inside information disclosure regime and amendments to the Listing Rules come into effect on 1 January 2013 – are you ready?

The date when the new statutory disclosure regime for inside information under Part XIVA of the Securities and Futures Ordinance (“SFO”) comes into effect – 1 January 2013 – is fast approaching.  In November, the HK Stock Exchange published its consultation conclusions on consequential changes to the Listing Rules as a result of the new statutory regime.  The Listing Rules will be amended from 1 January 2013 to remove from the Listing Rules the obligation to disclose price sensitive information and to clarify the respective roles and responsibilities of the Securities and Futures Commission (“SFC”) and the Stock Exchange.  These latest changes are briefly considered here.

Harmonising the regulation of market abuse in Europe

The European Commission has published its proposals for a Regulation on insider dealing and market manipulation (“the Regulation”) and a Directive on criminal sanctions for intentional market abuse (“the Directive”). The new measures will extend the scope of the existing regime to ensure that regulation keeps pace with market developments, to reinforce the investigative and sanctioning powers of regulators, and to better combat market abuse across commodity and related derivative markets.

The Commission has also published Frequently Asked Questions on the proposals and Frequently Asked Questions on Emissions Allowances. The proposals accompany revisions to the Markets in Financial Instruments Directive which aim to increase financial market oversight and transparency.

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