Introduction

Executing transactions in the ‘proper’ manner in relation to both Exchange and MTF rules (14.1, 14.2) and the regulator's rules in respect of such matters as order execution and best execution (13.1, 13.2) is one thing, but there is a further issue, in terms of market integrity in its widest sense: Ought the transaction to be carried out at all? In other words, the transaction must not constitute, or be part of, insider dealing, market manipulation or market abuse. None of this is affected by MiFID.

Insider dealing

Any form of express outlawing of insider dealing took a long time to find its way onto the Statute book. The 1962 Jenkins Committee recognised the mischief that ‘a director who has … acquired … a particular piece of information materially affecting the value of the securities of his company … will incur no liability … if he buys or sells such securities’ and a 1977 Department of Trade Report agreed: ‘[p]ublic confidence in directors and others closely associated with companies requires that such people should not use inside information to further their own interests … That insider dealing is wrong is widely accepted and … [should be made] a criminal offence … [With] market transactions … it will not … be practic able to identify a victim who has suffered as a result of insider dealing. This rules out any adequate civil law remedy that would compensate the victim and is a further reason why criminal sanctions are called for’.