Consultation on Code of Market Conduct (2018-04-17)

Summary

This is a consultation draft of a new Code of Market Conduct, issued by the GFSC under Section 41B of the Protection of Investors (Bailiwick of Guernsey) Law, 1987. The draft Code sets out descriptions of behaviour that the Commission considers would, and would not, amount to market abuse in relation to qualifying investments traded on regulated markets connected to the Bailiwick.

• Scope: Applies to behaviour occurring in the Bailiwick, or in relation to qualifying investments traded on a regulated market situated in or electronically accessible from the Bailiwick (e.g. London, New York or Tokyo exchanges).
• Market abuse descriptions: Sets out categories of abusive behaviour including manipulating transactions (e.g. wash trades, painting the tape, abusive squeezes), manipulating devices (e.g. pump and dump, trash and cash), dissemination of false or misleading information, and market distortion.
• Safe harbours: Describes behaviour the Commission considers does NOT amount to market abuse, which under Section 41E(1) of the POI Law is treated as a safe harbour.
• Guidance function: Once finalised, the Code would be used as guidance (not exhaustive or automatically conclusive) in determining whether particular conduct amounts to market abuse under the POI Law's market abuse regime (sections 41A to 41H).
• Relationship to other regimes: Clarifies that the Code does not modify disclosure obligations under any regulated market's rules or the Takeover Code, and interacts with, but is separate from, criminal law and other regulatory requirements.

As a consultation document, the Code is not yet in force; it invites industry and stakeholder feedback before the GFSC finalises and issues the Code. No specific obligations are currently binding on firms as a result of this document, though the Commission may amend or replace the Code once adopted.

Applies to

persons dealing in qualifying investments on regulated markets, market users/regular users, licensees conducting investment business under the POI Law, issuers of qualifying investments