Code of Market Conduct

Summary

This is the Guernsey Financial Services Commission's Code of Market Conduct, issued under Section 57 of the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020. It is a guidance document that describes types of behaviour the Commission considers do, and do not, amount to market abuse in relation to qualifying investments traded on regulated markets in or accessible from the Bailiwick of Guernsey.

The Code does not itself create new offences; it explains how the Commission will interpret the market abuse regime in Sections 56 to 63 of the Enforcement Powers Law, including manipulating transactions, manipulating devices, dissemination of false or misleading information, and distortion. It also sets out safe harbour behaviours that will not be treated as market abuse, and factors the Commission will weigh when assessing conduct.

• Manipulating transactions: Behaviour such as wash trades, painting the tape, order manipulation near market close, and abusive squeezes are described as amounting to market abuse.
• Manipulating devices: Practices such as pump and dump and trash and cash schemes are identified as market abuse.
• Dissemination: Knowingly spreading false or misleading information about qualifying investments (e.g. via bulletin boards) is treated as market abuse.
• Distortion: Conduct that creates a false or misleading impression of supply, demand, price or value, including in commodity markets, is covered.
• Safe harbours: Certain behaviours (e.g. legitimate tax or price-difference driven transactions, stock lending to meet genuine commercial demand) are described as not constituting market abuse.

The Code applies broadly to any person dealing in or in relation to qualifying investments on regulated markets connected to the Bailiwick, and is used by the Commission and others assessing whether conduct amounts to market abuse under the Enforcement Powers Law. It does not modify existing disclosure obligations under regulated market rules or the Takeover Code, and the Commission may amend or replace it at any time.

Key obligations

• Persons dealing in qualifying investments on regulated markets connected to the Bailiwick must not engage in behaviours described in the Code as amounting to market abuse (e.g. manipulating transactions, manipulating devices, dissemination of false information, market distortion).

Applies to

licensees under the POI Law, market users/regular users dealing in qualifying investments, persons trading on regulated markets accessible in the Bailiwick, investment exchanges licensed under section 4 of the POI Law

Related documents

• This document is made under Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020