A Historical Overview of Market Abuse Prohibition in the United Kingdom

Abstract

It is important to note that the United Kingdom’s market abuse regime has a separate and specific statute that deals with insider trading and another statute which broadly deals with market manipulation and other related market abuse activities. The market abuse legislation in the United Kingdom has further been carefully formulated to incorporate some of the provisions of the 2003 European Directive on market abuse. Consequently, this broad and extensive regulatory approach has led countries in other jurisdictions, including South Africa, to follow some of the enforcement approaches of the United Kingdom’s market abuse regime, especially with regard to the prohibition on insider trading. It is against this background that this article will, where applicable, undertake a comparative analysis of the market abuse prohibition in the United Kingdom and South Africa to explore their similarities and differences. To this end, a general historical overview of the insider trading legislation will be discussed first, followed by a similar discussion on the prohibition of market manipulation practices. Lastly, the available penalties will be discussed and thereafter, possible recommendations and/or concluding remarks will be provided.

DOI: 10.5901/mjss.2014.v5n20p49