Insider Dealing by Sarah Clarke

Author:Sarah Clarke
Language: eng
Format: epub
Publisher: Oxford University Press
Published: 2013-10-23T04:00:00+00:00

Inside information with respect to commodity derivatives

16.61 In the case of commodity derivatives, inside information is defined a little differently in s 118C(3) FSMA:54

In relation to qualifying investments or related investments which are commodity derivatives, inside information is information of a precise nature which

(a) is not generally available,

(b) relates, directly or indirectly, to one or more such derivatives, and

(c) users of markets on which the derivatives are traded would expect to receive in accordance with any accepted market practices on those markets.

16.62 ‘Accepted market practices’ is defined in s 130A(3) FSMA as:

practices that are reasonably expected in the financial market or markets in question and are accepted by the [FCA] or, in the case of a market situated in another EEA State, the competent authority of that EEA State within the meaning of [MAD].

16.63 The above provisions recognise that there are differences in the nature of information that is important to commodity derivatives from that which is important to other markets. Therefore inside information is defined by reference to information that the market participants in the market in question would expect to receive.55 Some clarification is provided by s 118C(7) FSMA which states that:

For the purposes of subsection (3)(c), users of markets on which investments in commodity derivatives are traded are to be treated as expecting to receive information … which is

(i) routinely made available to the users of those markets, or

(ii) required to be disclosed in accordance with any statutory provision, market rules, or contracts or customs on the relevant underlying commodity market or commodity derivatives market.

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