FI Supervision 5: Market Abuse 2017–2018

Over the past year, FI has primarily intervened against small-volume trading and ”wash trades” that were carried out deliberately or negligently by private individuals. The financial undertakings’ reporting plays a key role in FI’s possibilities for intervening against market abuse. FI’s cooperation with EBM has contributed to the development of this work. These are the three conclusions in FI’s report, Market Abuse 2017–2018.

FI Supervision 5 describes FI's observations related to the new market abuse legislation that was introduced in Sweden in February 2017.

The term market abuse refers primarily to market manipulation and insider trading, i.e. illegal behaviour that damages the confidence in the securities market.

The Market Abuse Regulation (MAR) is an EU regulation, and it is FI's role to monitor the market's compliance with this regulation. FI has a far-reaching mandate to investigate market abuse and intervene following breaches of the regulations. We share this investigation responsibility with the Swedish Economic Crime Authority.

The market abuse legislation applies to all trading in listed financial instruments, regardless of whether or not the trading occurs on a trading venue. The legislation also applies to manipulation of benchmarks, for example STIBOR, and OTC derivatives (if their value is dependent on listed instruments, commodities or emission allowances).

Trading venues and firms that arrange and execute transactions shall report suspected breaches to FI. It is important for the firms to have well-adapted systems and take preventive measures through internal training courses and the communication of information to customers. This enables successful prevention of market abuse.

The number of suspected regulatory breaches has increased since 2017. FI has primarily intervened against small-volume trading of private individuals and instances where private individuals trade with themselves ("wash trades") that resulted in market manipulation.

 

Summary:

Pursuant to the Market Abuse Regulation, Finansinspektionen is responsible for investigating market abuse and intervening in the event of breaches. Trading venues and other market participants are responsible for reporting suspected breaches to us. Finansinspektionen has noted that the number of suspected breaches has increased.

In this report Finansinspektionen (FI) describes its observations related to the new market abuse legislation that was introduced in Sweden in February 2017.
The term market abuse refers primarily to market manipulation and insider trading, i.e. illegal behaviour that damages the confidence in the securities market.

The Market Abuse Regulation (MAR) is an EU regulation, and it is FI's role to monitor the market's compliance with this regulation. FI has a far-reaching mandate to investigate market abuse and intervene following breaches of the regulation. FI shares the investigation responsibility with the Swedish Economic Crime Authority.

The market abuse legislation applies to all trading in listed financial instruments, regardless of whether or not the trading occurs on a trading venue. The legislation also applies to manipulation of benchmarks, for example STIBOR, and OTC derivatives (if their value is dependent on listed instruments, commodities or emission allowances).

Trading venues and firms that arrange and execute transactions shall report suspected breaches to FI. It is important for the firms to have well-adapted systems and take preventive measures through internal training courses and the communication of information to customers.

The number of suspected regulatory breaches has increased since 2017. FI has primarily intervened against small-volume trading of private individuals and instances where private individuals trade with themselves ("wash trades") that resulted in market manipulation.

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