Part 5 Part 5 Dealing in the Exchange
Chapter 1 Chapter 1 Insider Trading
Article (97) Definition of an "Insider"
For the purposes of this Chapter, an Insider is any person who has obtained the information stated in Paragraph (a) of Article (98) of this law;(1) By virtue of his employment or profession;(2) Being an officer or shareholder of the issuer of the securities, or(3) Through illegal means.
A person may be an insider if he is already aware that such information is classified as inside information even though none of the above applies to him.
Article (98) Inside Information and Profit(a) For the purposes of this Chapter, "Inside Information" means information that;1. is precise in nature relating directly or indirectly to one or more of the securities or the issuer thereof,2. has not been made public.3. if made public, is likely to have a significant impact on the price of those securities or their derivatives,4. is, directly or indirectly, related to derivatives of commodities which the traders expect to be disclosed according to the market regulations.(b) In this chapter "profit" includes avoiding of any loss.
Article (99) "Market Information"(a) For the purposes of this chapter, "Market Information" shall mean any published information about trading or non-trading in certain types of securities, their number, prices, range of price for trading or the identity of those involved or who may be involved, in any capacity, in such trading.(b) The Central Bank shall issue regulations concerning the necessary procedures and controls of publishing market information.
Article (100) Offences
A person who is in possession of Inside Information, as an Insider shall not: use such information to:(1) deal in any securities to which that information relates.(2) encourage any person to deal in any securities to which that information relates.(3) disclose inside information to any other person, otherwise than in the proper performance of the functions of his employment, office or profession.(4) violate the rules governing the publishing of market information.
Article (101) Claiming that Gains were Unexpected
The mere trading by any person with inside information in securities, or encouraging others to trade therein, shall not be considered as a violation to this chapter if,(1) he did not, at the time, expect that he will make a profit due to the Inside Information.(2) he reasonably believed at the time of dealing that the information had been disclosed widely enough that none of those taking part in the dealing would be prejudiced by not being aware of the said information.(3) he would have acted as he did even if such information was not available to him.
Article (102) Claiming Non-Awareness of the Significance of the Inside Information
A person with inside information shall not be violating this chapter if he proves that he did not expect, at the time of disclosure, any person to trade in such securities based on such information, or that he did expect such trading but never thought that such person would make profits because the disclosed information was an inside information
Article (103) Claiming that Action was taken in Good Faith
A person shall not be violating this chapter by virtue of dealing in securities or encouraging another person to deal, if he proves that he had acted in good faith in the course of his business as a licensed mediator or his employment with a mediator.
Article (104) Claiming that Inside Information is Market Information
An individual is not guilty of inside dealing by virtue of dealing in securities or encouraging another person to deal if he proves that:1. the information, which he had as an Insider, was market information.2. it was reasonable that any person in their position would have acted similarly despite having such information as an Insider at the time. In determining the appropriateness of such action, a special consideration shall be given to the content of the information, the circumstances in which it was first acquired and in what capacity did he act at the time of dealing.
Article (105) Other Defences(a) A person shall not be guilty of inside dealing by virtue of dealing in securities or encouraging another person to deal if he proves that:1. the securities were, at the time of dealing, under consideration or negotiation, or that the dealing took place during the course of a series of such negotiations.2. the dealing was intended to facilitate the negotiation of securities or execute a series of negotiations of such Securities.3. the dealing was completed in accordance with the Central Bank's price policies.
Chapter 2 Chapter 2 Violation of Market Dealings
Article (106) The Offence of Market Manipulation
In the application of this law a person is guilty of market manipulation if he:1. is engaged, or encourages others to engage, in any conduct that may give a false or misleading impression as to the supply of or demand for, or the price or value of any securities.2. is engaged, or encourages others, to engage in any conduct that may give an unrealistic picture of the market regarding the volume and prices of any securities.
Article (107) Defences
A person shall not be guilty of market manipulation if he proves that his reasons for engaging in the alleged conduct were legitimate and that he had acted in conformity with the accepted market practices in the market concerned, or that he had acted in conformity with any price stabilization rules made by the Central Bank, or if he believed on reasonable grounds that his conduct did not violate Article 106 of this law and that he had taken all reasonable precautions and exercised all due diligence to avoid behaving in any way against the said Article.