Home   Browse contents   View updates   Search  
     Quick search
Go
   

BackText onlyPrint

You need the Flash plugin.

Download Macromedia Flash Player



  • Part 6: Prevention of Market Abuse

    • Chapter 1 — Market Abuse

      • 54. Fraud and market manipulation

        A person shall not, in the DIFC or elsewhere, by any means, directly or indirectly, engage or participate in any act, practice or course of conduct relating to Investments that the person knows or reasonably ought to know:

        (a) results in or contributes to, or may result in or contribute to, a false or misleading impression as to the supply of, demand for or price of one or more Investments;
        (b) creates or is likely to create an artificial price for one or more Investments; or
        (c) perpetrates a fraud on any person.

      • 55. False or misleading statements

        A person shall not, in the DIFC or elsewhere, disseminate information by any means which gives, or is likely to give, a false or misleading impression as to one or more Investments when such person knows or could reasonably be expected to know that the information is false or misleading.

      • 56. Use of fictitious devices and other forms of deception

        A person shall not, in the DIFC or elsewhere, engage in any activity or conduct in relation to Investments, which consists of effecting transactions or orders to trade which employ fictitious devices or any other form of deception or contrivance.

      • 57. False or Misleading conduct and distortion

        A person shall not, in the DIFC or elsewhere, engage in any activity or conduct in relation to Investments, which does not fall under Articles 54, 55 or 56, that:

        (a) gives a false or misleading impression as to the supply of, or demand for, or as to the price of one or more Investments; or
        (b) would distort, or would be likely to distort, the market for one or more Investments; and
        (c) is likely to be regarded by market participants as a failure on the part of the person concerned to observe the standard of behaviour reasonably expected of a person in his position in relation to the market.

      • 58. Insider dealing

        (1) A person who is an insider shall not, in the DIFC or elsewhere, directly or indirectly, deal, or attempt to deal, in an Investment, or in a related investment, on the basis of inside information.
        (2) In this Article "Investment" does not include "commodity derivatives."

      • 59. Providing inside information

        (1) An insider shall not, other than in the necessary course of business, disclose inside information to another person.
        (2) An insider shall not procure another person to deal in the Investments or related investments in which the insider has inside information.
        (3) In this Article:

        "procure" includes:

        where a person induces or encourages another person by direct or indirect means.

      • 60. Inducing persons to deal

        A person shall not, in the DIFC or elsewhere, induce another person to deal in Investments:

        (a) by making or publishing a statement, promise or forecast if the person knows, or is reckless as to whether, the statement is misleading, false or deceptive;
        (b) by a concealment of material facts; or
        (c) by recording or storing information that the person knows to be false or misleading in a material respect or may be materially misleading.

      • 61. Misuse of information

        A person shall not, in the DIFC or elsewhere, engage in any activity or conduct in relation to Investments, which does not fall under Articles 58, 59 or 60:

        (a) by using information which is not generally available to market participants which, if available to a market participant, would be, or would be likely to be, regarded by him as relevant when deciding the terms on which transactions in Investments should be effected; and
        (b) is likely to be regarded by market participants as a failure on the part of the person concerned to observe the standard of behaviour reasonably expected of a person in his position in relation to the market.

      • 62. Application of provisions

        Articles 54 to 61 do not apply to conduct which occurs outside the DIFC unless the conduct affects the DIFC markets or users of the DIFC markets.

      • 63. Definitions for this Part

        (1) In this Part, in relation to Investments, or related investments,
        (a) "inside information" means information of a precise nature which:
        (i) is not generally available;
        (ii) relates, directly or indirectly, to one or more Reporting Entities or the issuer of the Investments concerned or to one or more of the Investments; and
        (iii) would, if generally available, be likely to have a significant effect on the price of the Investments or on the price of related investments; and
        (b) "insider" means a person who has inside information:
        (i) as a result of his membership of the board of Directors, or the Governing Body of the relevant Reporting Entity;
        (ii) as a result of his holding in the capital of the relevant Reporting Entity;
        (iii) as a result of having access to the information through the exercise of his employment, profession or duties;
        (iv) as a result of his criminal activities; or
        (v) which he has obtained by other means and which he knows, or could reasonably be expected to know, is inside information.
        (2) In Article 63(1)(a) information is precise if it:
        (a) indicates circumstances that exist or may reasonably be expected to come into existence or an event that has occurred or may reasonably be expected to occur; and
        (b) is specific enough to enable a conclusion to be drawn as to the possible effect of those circumstances or that event on the price of Investments or related investments.
        (3) In Article 63(1)(a)(iii), information would be likely to have a significant effect on price if and only if it is information of the kind which a reasonable investor would be likely to use as part of the basis of his investment decisions.
        (4) For the purposes of Article 63(1)(a), information about a person's pending orders in relation to an Investment or related investment is also inside information.
        (5) In Article 63(1)(a)(i), information which can be obtained by research or analysis conducted by, or on behalf of, users of a market is to be regarded, for the purposes of this Part, as being generally available to them.
        (6) In this Part, in relation to an Investment (the "First Investment"), a "related investment" means another Investment whose price or value depends, in whole or in part, on the price or value of the First Investment.

    • Chapter 2 — Defences

      • 64. Defences for market manipulation, insider dealing and providing inside information

        (1) A person shall not be found to have contravened Article 54 if the person establishes that the conduct or practice the person engaged in was carried out in the performance of:
        (a) permitted price stabilisation; or
        (b) a purchase of the person's own shares,
        in accordance with the Rules.
        (2) A person shall not be found to have contravened Article 58 if:
        (a) the person establishes that he reasonably believed that the inside information had been disclosed to the market in accordance with this Law or the Rules;
        (b) the dealing occurred in the legitimate performance of an underwriting agreement for the Investments or related investments in question;
        (c) the dealing occurred in the legitimate performance of its functions as a liquidator or receiver;
        (d) the dealing is undertaken solely in the course of the legitimate performance of his functions as a market maker;
        (e) the person executes an unsolicited client order in Investments or related investments while in possession of inside information without contravening Article 59 or otherwise advising or encouraging the client in relation to the transaction;
        (f) the dealing is undertaken legitimately and solely in the context of that person's public takeover bid for the purpose of gaining control of that Reporting Entity or proposing a merger with that Reporting Entity; or
        (g) the sole purpose of the Reporting Entity acquiring its own shares was to satisfy a legitimate reduction of share capital or to redeem Securities in accordance with the Rules.
        (3) A person shall not be found to have contravened Article 59 if:
        (a) the person establishes that the information was disclosed by him in accordance with any requirement of the law or a court order; or
        (b) the person establishes that he reasonably believed that the inside information had been disclosed to the market in accordance with this Law or the Rules.

      • 65. Chinese wall arrangements

        A person does not contravene Article 58 by dealing in Investments or related investments if:

        (a) it had in operation at that time an effective information barrier which could reasonably be expected to ensure that the inside information was not communicated to the person or persons who made the decision to deal and that no advice with respect to the transaction or agreement was given to that person or any of those persons by an insider; and
        (b) the information was not communicated and no such advice was given.