Session Four: Insider Dealing and Market Abuse

Insider dealing and market abuse sit across criminal law and regulatory rules. In practice, the same facts may be investigated on a dual-track basis. As the evidence develops, the FCA decides whether the case is best pursued criminally, civilly or through a combination of regulatory tools. That choice affects the standard of proof, the procedure and the sanctions in play.

For most practitioners, this is not abstract law. It is part of the firm's operating model: wall crossings, insider lists, restricted lists, watch lists, suspicious transaction and order reports, PDMR notifications, and the surveillance and governance behind them. The Insider Dealing operational briefing on this site covers that day-to-day delivery. This session sets out the legal framework beneath it.

Who this session is for. Compliance officers and market integrity teams in firms that issue, advise on, deal in or arrange transactions in financial instruments. In-house counsel. Senior managers responsible for market conduct. Internal audit. Practitioners working on the new cryptoasset regime.

Two regimes, one piece of conduct

The UK regulates insider dealing and market manipulation through two parallel regimes. The criminal regime sits in Part V of the Criminal Justice Act 1993, sections 52 to 64, and deals with insider dealing in securities. The civil regime is the UK Market Abuse Regulation, retained in UK law after the end of the implementation period on 31 December 2020, and it covers insider dealing, unlawful disclosure of inside information, market manipulation, and a set of related control obligations.

In many cases, the FCA may investigate the same underlying conduct with both criminal and civil outcomes in view. The criminal route requires proof to the criminal standard and carries custodial exposure. The civil route proceeds on the civil standard and brings financial penalties, public censure, prohibition, restitution and disgorgement into play. In practice, cases are often assessed on a dual-track basis before the FCA settles on the route that best fits the evidence and the public interest.

The civil regime is wider than the criminal regime. The criminal offence does not reach all conduct that UK MAR prohibits. It is limited to insider dealing in securities by primary insiders and certain tippees. The civil regime extends to a wider range of instruments, a wider range of persons, and a wider range of conduct including market manipulation.

The criminal offence: Part V of the Criminal Justice Act 1993

The criminal offence of insider dealing is contained in section 52 of the Criminal Justice Act 1993. It is committed where an individual who has information as an insider deals in securities that are price-affected securities in relation to the information, on a regulated market or through a professional intermediary. Section 52 also creates two further offences: encouraging another person to deal, and disclosing the information otherwise than in the proper performance of the person's employment, office or profession.

Five concepts do most of the work.

Inside information	Section 56. Information that relates to particular securities or a particular issuer, is specific or precise, has not been made public, and would, if made public, be likely to have a significant effect on the price of any securities.
Insider	Section 57. A person who has information from an inside source, including by virtue of being a director, employee or shareholder of an issuer, by virtue of having access to it through employment, office or profession, or as a tippee of such a person.
Dealing	Section 55. Acquiring or disposing of securities, whether as principal or agent, or procuring an acquisition or disposal.
Securities	Section 54 and Schedule 2. Shares, debt securities, warrants, depositary receipts, options on the above, futures on the above, and contracts for differences referenced to the above.
Defences	Section 53 and Schedule 1. The principal defences include lack of expectation of profit attributable to the information, belief that the information had been sufficiently disclosed, and that the defendant would have acted in the same way even without the information. Schedule 1 also contains market-information and price-stabilisation provisions.

The offence now carries a maximum sentence of ten years on indictment and an unlimited fine, with up to twelve months' imprisonment and a fine on summary conviction. For offending before the increase that took effect on 1 November 2021, the earlier maximum was lower. In practice, sentence turns on the scale of the conduct, the profit made or loss avoided, the offender's role, and the surrounding aggravating and mitigating features.

UK MAR: the civil regime

UK MAR is the principal civil regime. It applies to financial instruments admitted to trading on a UK trading venue, or for which a request for admission has been made, and to conduct relating to such instruments. It also reaches certain conduct in respect of related spot commodity contracts and emission allowances.

Three of its articles do most of the work in practice.

Article 14: insider dealing and unlawful disclosure

Article 14 prohibits three things. First, engaging or attempting to engage in insider dealing. Second, recommending that another person engage in insider dealing, or inducing another person to do so. Third, unlawfully disclosing inside information.

Insider dealing under Article 14 is defined in Article 8. It occurs where a person possesses inside information and uses that information by acquiring or disposing of, for their own account or for the account of a third party, financial instruments to which the information relates. The Article 8 use test is wider than the criminal section 52 test. It does not require the same procedural elements (regulated market or professional intermediary), and it captures attempted dealing as well as completed dealing.

Unlawful disclosure under Article 14(c) is the disclosure of inside information to another person except where the disclosure is made in the normal exercise of employment, profession or duties. This is the legal basis for the wall crossing process used in primary market transactions, where inside information is selectively disclosed to a controlled list of recipients who acknowledge their obligations.

Article 15: market manipulation

Article 15 prohibits market manipulation and attempts at market manipulation. Article 12 defines market manipulation broadly. It includes entering into transactions or placing orders that give false or misleading signals, secure prices at an abnormal or artificial level, employ a fictitious device or contrivance, or otherwise disseminate information that gives false or misleading signals about the supply, demand or price of a financial instrument.

Article 12 also identifies a non-exhaustive list of indicators that may suggest market manipulation, including marking the close, painting the tape, ramping, scalping, wash trades, layering, spoofing and the dissemination of false or misleading information. The substance is not exhaustively defined. The FCA, the courts and retained EU case law have developed the boundaries through enforcement and interpretation.

Article 16: suspicious transaction and order reports

Article 16 imposes the operational obligation practitioners meet every day. It requires any person professionally arranging or executing transactions to establish and maintain effective arrangements, systems and procedures to detect and report suspicious orders and transactions. Reports are made to the FCA as STORs.

The STOR obligation reaches both market operators and investment firms. It applies to orders as well as transactions. A suspicious order that does not result in a transaction may still need to be reported. The threshold is reasonable suspicion, not certainty. FCA reviews often focus on firms that over-think the threshold and under-report.

Inside information in practice

Article 7 of UK MAR defines inside information. The definition is broader than the criminal Part V definition. It covers any information of a precise nature, not generally available, relating directly or indirectly to one or more issuers or one or more financial instruments, which if it were generally available would be likely to have a significant effect on the prices of those instruments or related derivatives.

The four limbs each do specific work. The information must be precise. The information must not be generally available. The information must relate to issuers or instruments. The information must be price sensitive in the reasonable investor sense ("likely to have a significant effect").

The precision limb is often where the real analysis sits. Article 7(2) treats information as precise if it points to a set of circumstances or an event that exists or may reasonably be expected to come into existence, or to an event that has occurred or may reasonably be expected to occur, and is specific enough to allow a conclusion to be drawn about its possible price effect. A protracted process can generate inside information at intermediate stages, not only at the end point. In Lafonta v AMF (Case C-628/13), the Court of Justice confirmed that information can be precise even if it does not allow a conclusion on the direction of the price movement.

Inside information for issuers: Article 17

Issuers admitted to a UK regulated market or to certain other UK trading venues have a positive disclosure obligation under Article 17. They must inform the public as soon as possible of inside information that directly concerns them. The obligation is to disclose promptly, not to wait until disclosure is convenient. Delay is permitted only in narrow circumstances, summarised below.

Article 17(1)	Inside information directly concerning the issuer must be disclosed as soon as possible. Disclosure must be made through a channel that allows fast access and complete, correct and timely assessment by the public. UK issuers usually use a Regulatory Information Service.
Article 17(4)	An issuer may delay disclosure on its own responsibility where immediate disclosure is likely to prejudice its legitimate interests, where delay is not likely to mislead the public, and where the issuer can ensure the confidentiality of the information.
Article 17(5)	Specific provisions on delay by issuers that are credit institutions or financial institutions to preserve financial stability.
Article 17(7)	Where confidentiality is no longer ensured, the issuer must disclose as soon as possible. Leaks compel immediate disclosure.
Article 17(8)	Selective disclosure to a third party in the normal course of business triggers an obligation to make the information public, unless that third party owes a duty of confidence.

This is why listed issuers run a disciplined inside information process. Transactions, results work, strategic decisions and material negotiations have to be assessed as they develop, with a clear record of when information became inside information, whether delay conditions were met, who had access, and when disclosure was made or the matter ceased to qualify.

Insider lists

Article 18 of UK MAR requires issuers, and persons acting on their behalf or on their account, to draw up and maintain insider lists for those who have access to inside information. The list must be kept in the prescribed format and updated in line with the applicable technical standards. In practice, that means a clear event-based record unless the permanent insider route is properly justified, with the required identifying and timing details for each person with access.

Insider lists remain a frequent FCA finding area. Common failings include incomplete population, late entries, weak closure processes and poor coordination between issuers and advisers. Where advisers, lawyers, brokers or PR firms are acting on behalf of the issuer or on its account, they also need to meet the Article 18 requirement that applies to them.

PDMR notifications

Article 19 requires persons discharging managerial responsibilities, and persons closely associated with them, to notify the issuer and the FCA of transactions conducted on their own account in the issuer's shares, debt instruments, related derivatives or other linked financial instruments. The notification threshold is cumulative over the calendar year and is set by the legislation and the competent authority framework. It should not be treated in training material as a fixed universal figure without checking the current position.

The PDMR regime serves two purposes. It gives the market visibility of how senior figures within an issuer are trading. It also works as a safeguard against insider dealing, supported by Article 19(11), which restricts dealing during the closed period of 30 calendar days before the announcement of an interim financial report or a year-end report that the issuer is obliged to make public.

Market soundings

Article 11 provides a controlled gateway for the lawful disclosure of information in the course of a market sounding, defined as the communication of information before the announcement of a transaction in order to gauge the interest of potential investors. The disclosing market participant must follow a defined process, the recipient must be brought inside on clear terms, and records must be kept.

Article 11 exists to prevent inadvertent unlawful disclosure in market practices the industry relies on. In practice, it underpins pre-deal investor education in equity capital markets transactions, block trade soundings and early commercial discussions around private placements.

Sentencing and enforcement

Criminal insider dealing under section 52 of the Criminal Justice Act 1993 now carries a maximum of ten years on indictment and an unlimited fine, although earlier offending was subject to a lower maximum. Civil contraventions of UK MAR expose firms and individuals to unlimited financial penalties, public censure, prohibition, restitution and disgorgement. There is no statutory cap on FCA financial penalties for market abuse.

FCA enforcement on insider dealing and market manipulation remains a sustained priority. Published outcomes continue to include criminal convictions, civil penalties and prohibition orders. Supervisory work also keeps the focus on effective STOR arrangements, complete and timely insider lists, sound control of inside information, and credible market abuse risk assessments.

Practitioners should also be aware that market abuse cases sometimes overlap with parallel investigations: financial promotions, listing rule breaches, FCA Principle breaches, and senior manager accountability under the SMCR.

The cryptoasset market abuse regime

UK MAR does not currently apply to cryptoassets. The wider perimeter is changing under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, made on 4 February 2026. The new regime is expected to come into force on 25 October 2027. The FCA has now published final rules and guidance for firms authorised to operate under FSMA on or after that date, including material on admissions, disclosures and market abuse for cryptoassets.

The proposed framework follows familiar market integrity themes. It addresses insider dealing, unlawful disclosure of inside information and market manipulation in qualifying cryptoassets admitted to trading on qualifying cryptoasset trading platforms. It also proposes obligations on issuers, offerors and platforms around disclosure, systems and controls, and record-keeping. Some of the detail is crypto-specific, but the operating model will look recognisable to anyone who already works with market abuse controls in traditional markets.

The FCA's final rules and guidance sit alongside further policy and guidance material as the regime moves towards commencement. Firms expecting to operate platforms, intermediary services, issuance or public offer activity in scope should be preparing now. The control build is substantial: surveillance, governance, disclosure processes, access controls, record-keeping and escalation routes all need to be designed before go-live.

Further reading and resources

The following primary sources are the most useful companions to this session. All are publicly available.

• Criminal Justice Act 1993, Part V (sections 52 to 64). The criminal offence of insider dealing. Available at legislation.gov.uk.
• UK Market Abuse Regulation. Regulation (EU) No 596/2014 on market abuse, as it applies in UK law. Articles 7, 8, 11, 12, 14, 15, 16, 17, 18 and 19 are the provisions most often used in practice. Available at legislation.gov.uk.
• FCA Handbook: MAR. The FCA's sourcebook giving guidance on the application of UK MAR, including the Code of Market Conduct (COMC). Available through the FCA Handbook.
• FCA Market Watch. The FCA's regular publication on market integrity, STORs, and market abuse trends. Available at fca.org.uk.
• Disclosure Guidance and Transparency Rules: DTR 2. The FCA Handbook chapter on disclosure and control of inside information by issuers. Available through the FCA Handbook.
• Lafonta v AMF (Case C-628/13). Judgment of the EU Court of Justice on the precision limb of inside information. Available through the Curia case law database.
• Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. The statutory instrument expanding the UK cryptoasset regulatory perimeter. Full commencement is set for 25 October 2027. Available at legislation.gov.uk.
• FCA cryptoasset admissions, disclosures and market abuse materials. The FCA's consultation, policy and final guidance material on the admissions, disclosures and market abuse framework for qualifying cryptoassets. Available at fca.org.uk.
• Commission Implementing Regulation (EU) 2016/347. The technical standard on the format of insider lists. Available at legislation.gov.uk.
• Commission Delegated Regulation (EU) 2016/522. Supplementary detail around market manipulation indicators, delayed disclosure notifications and notifiable managers' transactions. Available at legislation.gov.uk.
• Insider Dealing: An Operational Briefing. The published companion guide on this site.
• New Zealand resources. Financial Markets Conduct Act 2013, Part 5. Available at legislation.govt.nz.
• Australia resources. Corporations Act 2001 (Cth), Part 7.10, particularly section 1043A. Available at legislation.gov.au.