MAM-1 MAM-1 Accepted Market Practices
MAM-1.1 MAM-1.1 Accepted Market Practices
MAM-1.1.1
Accepted market practices are those practices that are reasonably expected on one or more financial markets and are accepted by the CBB.
November 2010MAM-1.1.2
Accepted market practices in no way constitute safe harbours similar to those provided by section MAM-4.1 (which deals with price stabilization).
November 2010MAM-1.2 MAM-1.2 Criteria for Assessment of a Market Practice
MAM-1.2.1
When assessing whether a market practice is acceptable, the CBB will take at least the following criteria into account:
(a) The level of transparency of the relevant market practice to the whole market;(b) The disclosure requirement of the relevant market practice by the market participants;(c) The need to safeguard the operation of market forces and the interplay of supply and demand, or safeguard the interest of the securities holders;(d) The degree to which the relevant market practice has an impact on market liquidity and efficiency;(e) The degree to which the relevant practice takes into account the trading mechanism of the relevant market and enables market participants to react properly and in a timely manner to the new market situation created by that practice;(f) The risk inherent in the relevant practice for the integrity of directly or indirectly, related markets, whether regulated or not, in the relevant securities within Bahrain;(g) The outcome of any inspection or investigation of the relevant market practice by the CBB, by any other authority or market operator with which the CBB cooperates, by any other authority or market undertaking acting on behalf or on the authority of the CBB, or by the courts acting on a referral from the CBB, in particular whether the relevant market practice breached rules or regulations designed to prevent market abuse, or codes of conduct, be it on the market in question or on directly or indirectly related markets within Bahrain;(h) The structural characteristics of the relevant market including whether it is regulated or not, the types of financial instruments traded and the type of market participants, including the extent of non-professional investor participation in the relevant marketHaving regard to (c) above, the CBB takes account in its assessment of how the relevant practice will affect market conditions, with particular reference to daily weighted average prices or daily closing prices.
November 2010MAM-1.2.2
The CBB periodically reviews accepted market practices, in particular taking into account significant changes to the relevant market environment, such as changes to trading rules or to market infrastructure.
November 2010MAM-1.2.3
Where an organization representing companies making public offers of securities, investment service providers, investors or market operators seeks the CBB's acceptance of a market practice, the CBB shall consult the other organizations concerned before deciding whether to accept or reject such practice.
November 2010MAM-1.2.4
The CBB will also consult other competent authorities in respect of existing practices, notably on markets that are comparable in terms of structures, volumes or types of transaction.
November 2010MAM-1.2.5
Where inspections or investigations of specific cases have already started, the consultation procedure referred to above may be delayed until the end of such inspections or investigations and possible related sanctions.
November 2010MAM-1.2.6
A market practice that was accepted following the consultation procedure shall not cease to be accepted without using the same procedure. Where appropriate, a CBB instruction shall specify the arrangements for implementing the market practice accepting procedure.
November 2010MAM-1.3 MAM-1.3 Market Abuse
MAM-1.3.1
For the purposes of this Module, market abuse is behaviour or conduct (whether by one person alone or by two or more persons jointly or in concert):
(a) Which occurs in relation to securities traded on a market to which this Module applies;(b) Which satisfies any one or more of the conditions set out in paragraph MAM-1.3.2; and(c) Which is likely to be regarded by a regular user of that market who is aware of the behaviour or conduct as a failure on the part of the person or persons concerned to observe the standard of behaviour or conduct reasonably expected of a person in his or their position in relation to the market.November 2010MAM-1.3.2
The conditions referred to in paragraph MAM-1.3.1 (b) are that:
(a) The behaviour or conduct is based on information which is not generally available to those using the market but which, if available to a regular user of the market, would or would be likely to be regarded by him as relevant when deciding the terms on which dealings or transactions in securities of the kind in question should be effected;(b) The behaviour or conduct is likely to give a regular user of the market a false or misleading impression as to the supply of, or demand for, or as to the price or value of, securities of the kind in question;(c) A regular user of the market would, or would be likely to, regard the behaviour or conduct as behaviour or conduct which would, or would be likely to, distort the market in securities of the kind in question.November 2010MAM-1.3.3
For the purposes of this Module, the behaviour or conduct which is to be regarded as occurring in relation to securities, includes behaviour or conduct which:
(a) Occurs in relation to anything which is the subject matter, or whose price or value is expressed by reference to the price or value of those securities; or(b) Occurs in relation to securities whose subject matter is those securities.November 2010MAM-1.3.4
Information which can be obtained by research or analysis conducted by, or on behalf of users of a market, is to be regarded for the purposes of this Module as being generally available to them.
November 2010MAM-1.3.5
Behaviour or conduct does not amount to market abuse if it conforms with a rule which includes a provision to the effect that behaviour or conduct conforming with the rule does not amount to market abuse.
November 2010MAM-1.3.6
Any reference in this Module to a person engaged in market abuse is a reference to a person engaged in market abuse whether alone or with one or more other persons.
November 2010MAM-1.3.7
In this Module; "behaviour or conduct" includes action or inaction; "regular user" in relation to a particular market means a reasonable person who regularly deals on that market in securities of the kind in question.
November 2010MAM-1.3.8
The types of behaviour or conduct that amount to market abuse include:
(a) Abuse of information:(i) Insider dealing;(ii) Improper disclosure;(iii) Misuse of information.(b) Market manipulation:(iv) Manipulating transactions;(v) Manipulating devices;(vi) Dissemination;(vii) Misleading behaviour and distortion.November 2010
