Guidance for Standard II: Integrity of Capital Markets

Standard II, Integrity of Capital Markets: never acting on material nonpublic information, and never distorting prices or volumes to mislead the market.

1. 1. Standard II: Integrity of Capital MarketsMarkets only work if no one trades on secrets or fakes prices: never act on material nonpublic information, and never distort prices or volume to mislead.Video · 6 minFree15 min
2. 2. Standard II(A) cases: material, nonpublic or mosaic?Run every II(A) vignette through two gates, material and then nonpublic, and ask where each piece came from: analysis built from public and immaterial pieces is fine, one material nonpublic piece is not.15 min
3. 3. Standard II(A) cases: tipping, experts and firm controlsOnce you hold material nonpublic information, do not trade, do not tip, do not change a recommendation and send it to compliance; the cases test the many disguises acting and tipping can wear.16 min
4. 4. Standard II(B) cases: rumours, trades and intentManipulation is a false picture of price or volume created on purpose: ask whether the information was false or misleading, or the trades were designed to mislead, and whether the member knew or should have known the effect.15 min
5. 5. Standard II(B) cases: warning signs and surveillance controlsSix order patterns signal possible manipulation and five firm controls look for them; the signs are indicators, not proof, so intent to mislead and the know-or-should-know test still decide.14 min