The term “market abuse” is generally used to talk about insider dealing and market manipulation. This section contains information about market abuse, trading rules, insider dealing, market manipulation and suspicious transactions.
What does the term “market abuse” cover?
The definition of the term “market abuse” originates from Regulation (EU) No. 596/2014 on market abuse (the Market Abuse Regulation – MAR) and Directive 2014/57/EU on criminal sanctions for market abuse (the Market Abuse Directive – MAD). The aim of combatting market abuse is to ensure the integrity of the financial markets, and to increase investor confidence in such markets.
Market abuse may also arise where investors suffer damage, either directly or indirectly, because other individuals:
- have made use of confidential information (insider dealings);
- have acted to distort the price of financial instruments or have disseminated false or misleading information (market manipulation).
Such behaviour can undermine the principle that all investors should be treated equally.
Important legislation and Directives
In Austria, the Market Abuse Directive, the provisions in the Market Abuse Regulation (MAR) and the accompanying implementing acts that required transposing were transposed in the Stock Exchange Act (BörseG; Börsegesetz) published in Federal Law Gazette I No. 76/2016. This legal act was subjected to revisions as a result of the necessary to amend it due to the MiFID II/MiFIR package entering into force with effect from 3 January 2018, and was therefore recast as the Stock Exchange Act 2018 (BörseG 2018; Börsegesetz 2018), published in Federal Law Gazette I no. 107/2017, which entered into force on 3 January 2018.
The key statutory provisions in this regard are the prohibition of market manipulation pursuant to Article 154 para. 1 no. 3 BörseG 2018 in conjunction with Articles 12 and 15 MAR and Article 164 BörseG 2018 and the prohibition of insider dealing pursuant to Article 154 para. 1 nos. 1 and 2 BörseG 2018 in conjunction with Articles 8 to 11 and 14 MAR and Article 163 BörseG 2018. The trading rules of Wiener Börse AG also play an important role with regard to market abuse. Among other things, they are designed to counteract market abuse before it actually occurs and to facilitate the exposure of cases where breaches have occurred.
To achieve the aforementioned goals of ensuring market integrity and increasing investor confidence in such markets, ensuring that such provisions are complied with is absolutely essential. In the recitals of the Market Abuse Directive, in this context, it states that the introduction of criminal penalties should serve as a clear signal in severe cases of market abuse. It is made patently obvious to the general public as well as potential committers of market abuse that breaching the market abuse provisions is considered as unacceptable behaviour. EU Member States are instructed at least in severe cases and where there is the intent to commit such actions to punish them.
In transposing these provisions, the Stock Exchange Act now stipulates the following criteria for the delineation of penal liability in front of the courts:
|Insider dealing||Purchasing, selling, changing or cancellation of a trading order: by more than EUR 1 million||Primary insider: intent Secondary insider: deliberate conduct|
|Recommendation and unauthorised disclosing of insider information||Within 5 trading days following insider information being made available: change in price of at least 35 % and total turnover of at least EUR 10 million||Primary insider: intent Secondary insider: deliberate conduct|
|Market manipulation, provided that transactions or trading orders occurred||Purchasing, selling, changing or cancellation of a trading order: by more than EUR 1 million||Intent|
All activities that do not fulfil the aforementioned criteria fall within the competence of the FMA as the competent authority for administrative penalties.
Information about reporting market abuse
Complaints or information received from the market for punishing market abuse might contribute considerably and should be sent by e-mail to the FMA’s Complaints Unit at [email protected] or alternatively should be reported using the FMA’s Whistleblower System. Persons conducting transactions with financial instruments on a commercial basis are obliged to report suspicious transactions and orders. As the FMA is subject to official secrecy, it is not allowed to disclose any information about the progress and/or result of investigations.
Compliance with Trading Rules
Reporting of Suspicious Transactions and Orders