• MAM-3.11 MAM-3.11 Motives and Parties Involved in Market Manipulation

    • MAM-3.11.1

      Any manipulative behaviour or conduct prohibited under this Module will attract a penalty specified in Article 106 of the CBB Law and other enforcement actions by the CBB, irrespective of the objective of such manipulative market behaviour or conduct.

      However, the CBB would investigate into the intentions behind the market behaviour or conduct and the objectives of the market behaviour or conduct of the various parties while dealing with suspected market behaviour or conduct cases.

      (a) Some examples of such motives include:
      (i) Influencing the price or value of a security or a derivative contract, so that the manipulator can:
      •   Buy at a lower price;
      •   Sell at a higher price;
      •   Influence takeover bids, or other large transactions; or
      •   combat competitive transactions;
      (ii) Influencing the price of a derivative contract or the underlying asset;
      (iii) Influencing the subscription price in public or non-public offerings;
      (iv) Influencing the price/conversion ratio in connection with the merger of companies;
      (v) Influencing the price of a security in connection with take-over offers;
      (vi) Influencing someone to subscribe for, purchase, or sell assets or rights to assets, or to abstain from doing so;
      (vii) Influencing the accounts/balance sheet of institutional investors;
      (viii) Influencing the limit for triggering forced sale by creditors; and
      (ix) Influencing the impression of financial advice or placements.
      (b) Any person who violates, or aides or abets any violation of the provisions of this Module will be liable for penalty and other enforcement actions under the CBB Law, irrespective of the status or position of the person involved. Those in a position to effect a manipulation include:
      (i) Issuers of securities;
      (ii) Participants in the securities market, derivatives market or underlying cash market, including investors and institutions;
      (iii) Market intermediaries;
      (iv) Financial analysts;
      (v) Any other person;
      (vi) Any combination of the above acting in cooperation with one another; and
      (vii) Any person aiding or abetting the person(s) involved in prohibited behaviour or conduct.
      November 2010