HM Treasury News Release
2 November 1999
CLARIFYING MARKET ABUSE IN FINANCIAL SERVICES
GOVERNMENT RESPONDS TO CONSULTATION
Important amendments to achieve greater clarity and certainty in the
definition of market abuse in the Financial Services and Markets Bill
currently before Parliament were announced by Economic Secretary Melanie
The government amendments, agreed by the Standing Committee on the
Bill, will :
*introduce additional protections for those who:
*take care not to commit market abuse
*reasonably believe that their behaviour is not abusive
*act in conformity with FSA rules, eg on price stabilisation.
*make it clear that behaviour can only be penalised if it is not in
accordance with what a regular user of the market would reasonably
Miss Johnson said:
"Market abuse is bad for the markets and bad for the UK economy.
We are determined to be tough on abusers. The action we are taking
in the Financial Services and Markets Bill is essential to protect
the integrity of UK financial markets. This is in all our interests.
"We have listened carefully to concerns about the need for the Bill
to be as clear and as fair as possible, including the views of the
Joint Committee under Lord Burns. These amendments reflect close consultation
with the industry and market experts and also the recommendations
of the Joint Committee. The changes make sure that people can only
be penalised for market abuse when their behaviour fails to meet what
a regular user of the market would consider to be expected market
NOTES TO EDITORS
The Financial Services and Markets Bill (FSMB), was introduced to
Parliament on 17 June (HMT news releases 98/99 and 99/99).
It establishes a single regulatory system in place of the existing
separate arrangements for different sectors.
The Financial Services and Markets Bill has been undergoing detailed
scrutiny in Standing Committee since publication in June. This will
continue in the next Session of Parliament under a new and innovative
procedure to improve and modernise Parliamentary procedure, agreed
by the House earlier this week.
Media enquiries should be addressed to Charles Keseru or Deborah Done
in the Treasury Press office on 0171 270 5188 and 0171 270
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