Code of Market Conduct Change

As will be known, the FSA’s Code of Market Conduct is incorporated within MAR 1.

Following a decision by the European Court of Justice (ECJ) in the Spector case (see link to Spector Case C-45/08) the FSA will, effective from 6 March 2011, delete MAR 1.3.4E.

An important element of the case concerning insider dealing was the meaning of the word ‘using’ as in persons should be prohibited from using inside information in the trading of financial instruments.

The effect of the decision is that a person who holds inside information, and who trades in financial instruments to which that information relates, implies that the person has used that information for the purposes of insider dealing (this is without prejudice to a person’s right to rebut that presumption).

MAR 1.3.4E suggested that one had to consider a person’s intention to prove insider dealing. Following the ECJ decision the FSA’s view is that it is not necessary to provide evidence of a person’s intention in order to prove insider dealing.