Tuesday, October 8, 2019

Why does the UK financial services regulator take such a dim view of Essay

Why does the UK financial services regulator take such a dim view of both market abuse and insider dealing - Essay Example 179). Since the past decade, financial markets have experienced essential reforms. This is because globalization has had dramatic and far-reaching effects on United Kingdom. Market abuse and insider dealings are criminal cases for which one is to be fined or publicly censured (Avgouleas, 2005, p. 179). Market abuse is more loosely delineated than insider dealings. Most of the offenses in the financial markets are dealt with under the market abuse regime. The financial service regulator can enforce a criminal prosecution on a market abuse case if it deems fit and if there is sufficient evidence. Market abuse, according to Alexander (2001, p. 12), refers to improper behavior that destabilizes the United Kingdom markets and harms the interests of the ordinary market users and participants. For this reason, the financial services regulation Act has created sanctions and penalties which are adjacent to the criminals’ offenses Act (Compliance Reporter, 2011, p. 2-3). The primary asp ect of market abuse is behavior in relation to shares and other financial instruments transacted publicly in United Kingdom. For behavior to be termed as an insider dealing, it should typify one of the seven types of insider dealings and market abuses as described by the financial service regulator. However, it should be noted that insider dealing and market abuse acts amount to criminal offenses subject to penal sanctions. The misleading statements and courses of conduct with the aim of inducing another person to implement or desist from carrying out rights in relation to investments amount to criminal offenses (The Compliance Reporter, 2011, p. 4). The market abuse regime will nab anyone: not only the individuals working in the financial markets or who manage the quoted companies on the board but also anyone who will attempt to abuse the securities markets in delineated ways. An individual is liable even when the actions were unintentional and or indirect (encouraging such behavio rs). According to Alexander (2001, p. 4), market abuse and insider information regime covers financial instruments such as the shares, futures, warrants, options and debt insurance, and contracts for differences, transacted on every regulated market in United Kingdom. In addition, the regime covers all the operations associated with the financial instruments even when carried out off-market. In other instances, conduct according to other related financial instruments or essential goods may be nabbed, even when the instruments are not transacted on a normal regulated market. In addition, an individual’s conduct involving securities transacted on an overseas unfettered market may be nabbed if an option related to them is merchandized in United Kingdom. The market abuse regime purposes to safeguard markets from harm to their efficiency and to guarantee effectiveness, order and fairness. The financial service regulator has the responsibility of issuing codes of conduct in the mar ket, which give appropriate direction to individuals determining whether behavior constitutes abuse or not. An insider, in reference to Alexander (2001, p. 10), refers to an individual who has inside information about an investment as a result of his or her membership in the administrative or supervisory body of an issuer of qualifying venture or management. An individual may also be an insider due to holding capital of an issuer of a stipulated venture or due to having right to use the data by the fact of employment, professionalism, or responsibilities. In addition, an

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