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Financial Markets Conduct Act 2013

Dealing in financial products on markets - Market manipulation

267: Persons treated as contravening false or misleading appearance of trading prohibition

You could also call this:

"Breaking rules by making fake trades to trick people"

Illustration for Financial Markets Conduct Act 2013

You are treated as breaking the rules if you trade financial products in a way that creates a false appearance of trading. This happens when you buy or sell products, but the person who actually owns them does not change. You can be treated as breaking the rules if you make an offer to trade financial products and someone related to you makes a matching offer to trade the same products. This rule does not apply if you were acting on behalf of someone else when you traded the products, or if you did not know that the ownership of the products would not change. You can read more about this rule in section 265 and it is also subject to section 268.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091379.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
Previous

266: Exception for short selling and crossings, or

"Selling financial products you don't own, or buying and selling at the same time, is allowed in some cases"

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268: Defence, or

"Saying you didn't break the trading rules because you had a good reason"

Part 5Dealing in financial products on markets
Market manipulation

267Persons treated as contravening false or misleading appearance of trading prohibition

  1. A person (A) must be treated as contravening section 265 if A is directly or indirectly a party to trading in the quoted financial products of a listed issuer from which no change in beneficial ownership results.

  2. Subsection (1) does not apply if,—

  3. in trading the financial products, A was acting on behalf of another person; and
    1. A did not know, and ought not reasonably to have known, when trading the financial products that no change in beneficial ownership would result.

      1. A person (A) must be treated as contravening section 265 if—

      2. A has made an offer to trade the financial products of a listed issuer; and
        1. either A or, to A's knowledge, an associated person of A has made or proposes to make an opposite offer (the opposite offer) to trade financial products of the listed issuer; and
          1. the opposite offer substantially matches A's offer as to the number and price of the financial products.

            1. This section is subject to section 268.

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