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Financial Markets Conduct Act 2013

Dealing in financial products on markets - Insider trading - When prohibition on insider conduct does not apply

250: Exceptions in case of knowledge in relation to derivatives

You could also call this:

"It's okay to trade derivatives if you know things about your own deals or business."

Illustration for Financial Markets Conduct Act 2013

You do not break the law if you trade in derivatives because you know about your own past, current, or proposed transactions or agreements concerning those derivatives. This also applies if you know about your own business activities, transactions, or agreements concerning the underlying things that the derivatives are about. You can trade in derivatives with this knowledge without contravening section 241(2).

If someone advises or encourages you to trade or hold derivatives, they do not break the law just because they know about your past, current, or proposed transactions or agreements concerning derivatives. This also applies if they know about your business activities, transactions, or agreements concerning the underlying things that the derivatives are about, which they found out while acting as your adviser. They can advise you with this knowledge without contravening section 243(2).

You can find more information about this by looking at the related legislation.

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249: Exceptions in case of knowledge of person's own intentions or activities, or

"It's okay to trade or advise on financial products if you know your own plans or someone else's plans."

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251: Exception for agent executing trading instruction only, or

"Trading for someone else is okay if you just follow their instructions and don't give them secret information."

Part 5Dealing in financial products on markets
Insider trading: When prohibition on insider conduct does not apply

250Exceptions in case of knowledge in relation to derivatives

  1. A person (A) does not contravene section 241(2) merely because A trades in derivatives with knowledge of A's own past, current, or proposed—

  2. transactions or agreements concerning those or any other derivatives; or
    1. business activities, transactions, or agreements concerning the underlying.

      1. If a person (B) advises or encourages another person (A) to trade or hold derivatives, B does not contravene section 243(2) merely because B has knowledge, acquired in the course of acting as A's adviser, of A's past, current, or proposed—

      2. transactions or agreements concerning derivatives; or
        1. business activities, transactions, or agreements concerning the underlying.

          Compare
          • SR 2010/354 r 3