the mechanics and regulation of market abuse

THE MECHANICS AND REGULATION OF MARKET ABUSE

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The Mechanics andRegulation of Market

AbuseA Legal and Economic Analysis

EMILIOS AVGOULEASDept of International and European Studies

University of Piraeus

1

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Library of Congress Cataloging-in-Publication DataAvgouleas, Emilios.

The mechanics and regulation of market abuse: a legal and economic analysis / Emilios Avgouleas.

p. cm.Includes index.ISBN 0–19–924452–9 (hardcover: acid-free paper) 1. Insider trading in

securities—Law and Legislation—Great Britain. 2. Insider trading in securities—Law and legislation—European Union countries. 3. Insider trading in securities—Law and legislation—United States. 4. Remedies (Law). 5. Law reform. I. Title. K1115.I57A94 2005345.41�0268—dc22 2005014239

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on acid-free paper by Biddles Ltd., King’s Lynn

ISBN 0–19–924452–9 978–0–19–924452–2

1 3 5 7 9 10 8 6 4 2

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To Claudia for love and affection

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Preface

This book is equally addressed to the scholar and practitioner of international financialmarkets and UK and EC securities regulation, who wish to learn more and under-stand better the mechanics of market abuse and the theoretical and practical premisesof its prohibition. It constitutes an interdisciplinary study of the offences of insiderdealing and market manipulation, together defined as market abuse, and provides acritical analysis of the UK and the EU market abuse regimes. The analysis makesextensive and critical use of relevant American literature and case law and discussescritically modern and ‘post-modern’ finance theory relying, to some extent, on theirfindings. Particular emphasis is given to the economic analysis of the rules prohibitinginsider dealing and market manipulation, evaluating their effect in terms of marketwelfare. Furthermore, it is with regret that for reasons of style ‘he’ is used much morethan ‘she’. However, where possible an effort has been made to use terms free of anygender bias.

In the many years that have passed since the original idea of writing this book arose,I have incurred a number of debts. Bearing the risk that the list below will read likea graduate student’s long-winded catalogue of acknowledgements, I shall proceed bygiving a comprehensive account of them. After all, as in Sean Connery’s TV commercialfor a Scotch Whisky brand: ‘some people mature, others age’. I have yet to meet aperson who wants to belong to the second group.

I am generally indebted for their mentoring, support and encouragement, since myundergraduate years, to Professors George Leventis and Nikos Alivizatos of theFaculty of Law of the University of Athens, as well as to Mrs Lili Alivizatos, who hasalways indulged my taste for lengthy discussions on the history of Greek literature andthe intricacies of cultural politics. Also, I am indebted to Professor Barry Rider ofIALS and Mads Andenas of BICL for never failing to provide me with interestingideas and unreserved encouragement.

From the much longer list of specific debts, I am first greatly indebted to WilliamBlair, QC, of Gray’s Inn and the LSE, for being most inspiring while supervising myLLM and PhD theses between 1994 and 1999 and remaining a very supportive andunderstanding mentor ever since. His acclaimed legal skill and aptitude for commonsense has taught me that all ideas and theoretical discussions are much more valuablewhen they can find application in legal practice and day-to-day economic life. I havebeen given similar lessons by the good lawyers I have worked with at Clifford Chanceand Linklaters, especially Chris Bates of Clifford Chance and Paul Nelson, MichaelKent, and Simon Firth of Linklaters. It is unfortunate that the academic in me neverfully gave up! Furthermore, Professor Ross Cranston of the LSE, once my LLM andPhD theses co-supervisor and later a Labour MP for Dudley North and the UK’sSolicitor General, Professors Anthony Ogus, my former faculty mentor in Manchesterand my advanced instructor in the economic analysis of law, Martin Loughlin, a former dean of the Manchester University Law Faculty, now the chair of public law at

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Prefaceviii

the LSE, Neal Duxbury, and David Milman should also be credited for teaching mevery valuable lessons. First, I have benefited from their advice and guidance regardingthe proper technical and doctrinal approach to interdisciplinary scholarship. Secondly,their academic integrity has been for me a shining example from which I have learnedthat both sides of any argument merit respect and discussion. I hope that I haveabsorbed these lessons; if not, the fault is mine. Mr Edward Fleishman of Linklaters,New York, a former SEC Commissioner, and Cynthia Lichtenstein, Professor Emeritaof Boston College, respectively the current and former chairpersons of theInternational Securities Regulation Committee of the ILA should be thanked for theirencouragement, vote of confidence in difficult times, and stimulating discussions onthe proper reach of securities regulation in the US, EU, and international contexts.

Special thanks must go to John Louth at OUP and his staff, especially to GwenBooth for her kind patience and continuous assistance and encouragement while writ-ing this book, Louise Kavanagh for supervising the production of the book, andAlison Floyd for her dedication and diligence with a very untidy manuscript. I’mindebted to Professors Emeriti Phaedon Kozyris, of the University of Thessaloniki,formerly Professor of Ohio State University, and Leonidas Georgakopoulos, of theFaculty of Law of the University of Athens, for invaluable insights informed by theirvery long and distinguished careers in the field of securities law both as renowned aca-demic teachers and as practising lawyers. My former colleagues in Manchester,Margaret Halliwell, currently a Reader in Law at City University, Andrew Griffiths,Professor Asif Qureshi, an acclaimed international economic law expert, AngusMacCulloch and John Murphy, should also be thanked for very stimulating discus-sions, and loads of support and friendship. The same applies to my current colleaguesat the University of Piraeus. I have held, in the not so remote past, discussions on olderdrafts of the chapters that deal with the economics of financial markets with the LSEProfessors Charles Goodhart, Michael Power, and John Board. I want to thank themagain for their help and valuable insights. A vote of thanks should also be extended toProfessor Hugh Collins of the LSE for discussions on the theoretical constructions ofthis book during its very early stages, and Judge Richard Posner for tempering, but notextinguishing, with his learned and reasoned arguments, during a meeting in Athens,my zest for behavioural analysis. Finally, and above all, I want to thank my parents andClaudia; without her unfailing support, love, and encouragement this book wouldhave never been completed. The fact that this book is dedicated to her reflects the levelof my gratitude. The law is stated as it stands on 30 November 2004, except for thediscussion of the UK’s market abuse regime. The changes to the previous regime intro-duced by the Market Abuse Regulations 2005 and the FSA’s revision of its rulebooks,to come into force on 1 July 2005, in the context of the implementation in the UK ofthe EC Market Abuse Directive, have been fully considered to provide a comprehen-sive and up-to-date analysis of the new regime.

Emilios AvgouleasNew York City and Campo Grande, Mato Grosso doSul

April 2005

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Foreword

The phenomenon of the globalization and expansion of the financial markets drivenby the revolution in IFT has been the subject of much analysis in the literature.Regulatory authorities have tried to respond by formulating standards intended, forinstance, to promote transparency, the capital adequacy of participating institutions,and the safeguarding of systemically important payment and settlement systems.Their ultimate concern is with financial stability, and the potential global conse-quences of failure.

But there is another aspect of market regulation which has as much to do with thefairness of trading as with the stability and efficiency of the markets concerned. Themisuse of market mechanisms, usually though not always for personal (or corporate)gain, is rightly attracting growing attention. The subject has become known as ‘marketabuse’, a term which neatly encapsulates the essence of the behaviour concerned. Butwhat exactly is market abuse? How is it to be differentiated from the legitimateexploitation of competitive opportunity that fuels every successful market? What isthe rationale of prohibiting such behaviour? And assuming that prohibition is thedesired outcome, how is it best achieved? In particular, what is the optimum mix ofcriminal, civil, and regulatory sanctions?

None of these questions admit easy answers, but in this masterly study, Dr EmiliosAvgouleas addresses each of them in turn, placing them squarely in the context ofcontemporary market practice. The book is an economic as well as a legal analysis ofthe subject. Its opening section contains an exposition of the theory of financial markets,thereby making accessible to a legal audience contributions by leading economists,many of them from the United States. The result is an integration of economic theoryand legal principle, investing the author’s conclusions with an authority that comesfrom across the disciplines.

In terms of legal prohibition, there is comparative consensus on the scope of insiderdealing. But as the author points out, the prohibition against market manipulation ismuch more elusive. Dr Avgouleas has formulated a definition in this respect whichwill repay careful study by regulators and market participants alike. As he shows, inpractice, the problem regulators will face is in applying definitions (which are neces-sarily couched in general terms) to specific market events. Sometimes, as with front-running and the like, the proscribed behaviour may be relatively recognizable. Butinnovation is an essential feature of modern markets, and in drawing the line betweenthe acceptable and the unacceptable, it may often be necessary to go back to firstprinciple. Here, the Mechanics and Regulation of Market Abuse will provide a wealth ofmaterial to make an informed judgment.

Within the European Union, spurred by the successful introduction of the euro, anew market abuse regime has emerged as part of the framework for a single market infinancial services. Drawing on the author’s wide international experience, the core ofthe book discusses the Market Abuse Directive, and the ‘Level 2’ Implementing

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Measures. He considers the legislation aimed specifically at market abuse alongsideother framework measures, such as the Transparency and Prospectus Directives, andthe Directive on Markets in Financial Instruments. Concerned to paint the picture ofa coherent whole, the author nevertheless predicts the likelihood of uneven applica-tion by national authorities. As throughout, his comments draw valuably on theAmerican experience, both positive and negative, thereby providing a roundedperspective on the subject.

This part of the book also analyses the market abuse regime in the UnitedKingdom. He usefully puts the topic in its historical context, demonstrating that itgoes back at least to the South Sea Bubble. The test eventually enacted in the FSMA2000 has been influential in the formulation of a European standard, but it may havebecome unnecessarily complicated in the process of implementation of the Directive.Again, the author’s comments are worthy of close study.

Finally, Dr Avgouleas discusses the controversial issue of developing civil remediesto be available to affected market users as a means of deterring abuse. Whateverconclusion one may reach as to the desirability of such an approach, this is a mostthought-provoking part of the work, making clear the conflicting policy issues, alongwith an insightful, and (one may add) likely to be an influential, critique of key legalissues such as the scope of recoverable loss.

In summary, market abuse is a subject central to any appraisal of fair financial deal-ing It is a subject which above all requires an appreciation that eliminating unfairnessin market practice involves the balancing of different considerations, some of whichare at the heart of what makes markets work. To this end, this book by Dr Avgouleas isa milestone.

William Blair QCGray’s Inn

May 2005

Forewordx

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Contents

Table of Cases xviiTable of Treaties, European Legislative Instruments, and National Legislation xxvList of Abbreviations lii

I . ECONOMIC ANALYSIS

1. Introduction 3

1.1 The Importance of Open Markets Free of Abuse 31.1.1 The Mechanics of Market Abuse 31.1.2 Efficient Allocation of Resources and Legitimacy 4

1.2 A Modern Study of Market Abuse 51.2.1 Is There a Need for a Modern Study of Market Abuse? 51.2.2 The End of an Era 71.2.3 Regulatory Reform 9

1.3 Scope and Structure 111.3.1 Analysing and Reconceptualizing Market Abuse 111.3.2 Structure 19

2. Modern Financial Markets and Finance Theory 22

2.1 Introduction 222.2 The Modern Market Landscape 23

2.2.1 The Division and Function of Modern Financial Markets 232.2.2 Securities Markets 252.2.3 Commodity and Financial Futures Markets 42

2.3 Modern and ‘Post-modern’ Finance Theory 442.3.1 Introduction 442.3.2 The Rise and Fall of the Efficient Market Hypothesis: The ‘Story of

a Death Foretold’? 452.3.3 Behavioural Analysis, ‘Noise’, and ‘Chaos’ 56

2.4 Bubbles, Manias, Cognition, and Herding 632.4.1 Introduction 632.4.2 Bounded Rationality and ‘Rules of Thumb’ 652.4.3 Overconfidence 662.4.4 Bubbles and Rationality: ‘Herd in the Street’ 67

2.5 Concluding Remarks 71

3. Deconstructing and Reconceptualizing Market Abuse 75

3.1 Introduction 753.2 The Mechanics of Insider Dealing 76

3.2.1 Introduction 763.2.2 Economic Analysis 793.2.3 The Impact of Insider Dealing on Market Efficiency and Outside Traders 80

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3.3 Corporate Fraud, Governance Failures, Bubbles, and Market Abuse: Behavioural Transmissions and Causal Linkages 853.3.1 Market Abuse and Corporate Fraud 853.3.2 Bubbles and Market Manipulation 873.3.3 Market Abuse and Corporate Governance 923.3.4 Insider Dealing and Market Manipulation 96


4. The Mechanics of Market Manipulation 103

4.1 Introduction 1034.2 The Mechanics of Market Manipulation 104

4.2.1 Defining Market Manipulation 1044.2.2 Effects-based Approach and Price Artificiality 1084.2.3 Reconceptualizing Market Manipulation 116

4.3 Market Manipulation, Species, Devices, and Techniques 1184.3.1 Forms of Market Manipulation 1184.3.2 Information-based Manipulations 1194.3.3 Manipulations Based on Artificial Transactions 1274.3.4 Price Manipulations 131


5. The Regulation of Market Abuse 156

5.1 Introduction 1565.2 Theories of Regulation and Financial Market Regulation 158

5.2.1 Introduction 1585.2.2 Theories of Economic Regulation 1605.2.3 Forms of Government Regulation and Regulatory Instruments 164 5.2.4 Financial Market Regulation 1675.2.5 Concluding Remarks 172

5.3 Mandatory Disclosure 1735.3.1 The Origins of Mandatory Disclosure Regulation 1735.3.2 Mandatory Disclosure and Economic Analysis 1765.3.3 Concluding Remarks 183

5.4 Market Transparency and the Liquidity Trade Off 1905.4.1 Defining Market Transparency 1905.4.2 The Welfare Effects of Market Transparency Rules 191

5.5 Insider Dealing: Crime and Punishment? 1945.5.1 Different Aspects of the Regulatory Debate 1945.5.2 US Insider Dealing Jurisprudence 1965.5.3 The Case for the Deregulation of Insider Dealing 1995.5.4 The Case for the Regulation of Insider Dealing 2015.5.5 Concluding Remarks 205

5.6 The Regulation (Prohibition) of Market Manipulation 2105.6.1 Introduction 2105.6.2 Economic Efficiency and Market Manipulation 2115.6.3 The Prohibition of Price Manipulation 218

Contentsxii

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5.7 Market Manipulation and Exchange Self-Regulation: A Critical Evaluation 2265.7.1 Introduction 2265.7.2 The Costs and Benefits of Self-Regulation 2275.7.3 Exchange Self-Regulation and the Deterrence of

Market Manipulation 2295.8 Concluding Remarks 234

II . THE EU AND UK MARKET ABUSE REGIMES

6. The Emerging EU Regime for the Regulation of Market Abuse 239

6.1 Introduction 2396.2 The Evolution of EC Securities Regulation 241

6.2.1 The Principle of ‘General Good’ in the ECJ’s Case Law 2416.2.2 The First Financial Services Consensus and the Delors

Commission: The Internal Market ‘is not working’ 2426.2.3 The Second EU Consensus for Financial Services: The Implementation

of the FSAP and the Reform of EC Financial Market Legislation 2456.2.4 The Committee of the Wise Men and the ‘Lamfalussy Process’ 246

6.3 The Market Abuse Directive 2506.3.1 The Need for a Market Abuse Directive 2506.3.2 The Prohibition of Insider Dealing 2516.3.3 Issuers’ Continuing Disclosure Obligations 2636.3.4 Prohibition of Selective Disclosure 2656.3.5 Notification Duties Imposed on Issuers and their Managers 2666.3.6 Investment Recommendations and Disclosure of Interests 2676.3.7 Market Manipulation 2766.3.8 Duty to Prevent Market Abuse 2886.3.9 Supervisory Powers to Combat Market Abuse 2906.3.10 Regulatory Cooperation under the Market Abuse Directive 2916.3.11 Civil Liability for Market Abuse in EU Member States 292

6.4 The MiFID, the Prospectus, and the Transparency Directives as Part of the Emerging EU Regime for the Regulation of Market Abuse 2956.4.1 The MiFID Rules Safeguarding Market Integrity in the EU 2956.4.2 The Public Offers and Admissions Prospectus Directive 3016.4.3 The Transparency Directive 304


7. The Prohibition and Punishment of Market Abuse in the UK 307

7.1 Introduction 3077.1.1 The Evolution of the UK’s Market Abuse Regime 3077.1.2 The Market Abuse Regime under FSMA 2000 and its Reform 310

7.2 Criminal Liability for Insider Dealing and Market Manipulation 3137.2.1 Early Statutory Prohibitions 3137.2.2 Misleading Statements and Dishonest Concealment 314

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7.2.3 Misleading Practices and Conduct 3167.2.4 Insider Dealing as a Criminal Law Offence 3207.2.5 Other Statutory Offences 3247.2.6 The Common Law Offences 328

7.3 The FSMA Offence of Market Abuse 3327.3.1 Introduction 3327.3.2 Definitions and Scope of the Offence of Market Abuse 3337.3.3 COMAC Guidance on Market Practices Caught by the

Offence of Market Abuse 3417.3.4 The New Regime for Investment Research Recommendations,

Disclosure of Inside Information, and Notification of Suspicious Transactions 359

7.4 Regulatory Remedies and Criminal Prosecution 3687.4.1 Regulatory Investigations 3687.4.2 Remedies 3717.4.3 Criminal Prosecution and Trial 383


8. Civil Liability for Market Abuse in the UK 389

8.1 Introduction 3898.2 Civil Liability for Market Abuse: The FSMA Framework 391

8.2.1 Breaches of Section 118 3918.2.2 Liability for Misrepresentations Relating to the Listing and Public Offer

of Securities 3958.2.3 Civil Liability for Unauthorized Investment Advertisements and Other

Financial Promotions 4048.2.4 Monetary Awards by the Financial Services Ombudsman Scheme 409

8.3 Claims in Tort and for Breach of Contract 4118.3.1 Introduction 4118.3.2 Claims in Tort 4138.3.3 Remedies for Breach of Contract 426

8.4 Liability in Equity 4308.4.1 Breach of Fiduciary Duties and Market Abuse 4308.4.2 Duty of Care in Equity 4318.4.3 Duty of Loyalty 4318.4.4 Directors’ Duties 4328.4.5 Equitable Remedies 434

8.5 Unjust Enrichment—Restitution 4368.5.1 Introduction 4368.5.2 Tracing at Common Law 4368.5.3 Constructive/Resulting Trusts and Tracing in Equity 437


III . MARKET ABUSE DETERRENCE

9. Market Abuse Deterrence Under a Civil Liability Regime 449

9.1 Introduction 4499.2 Public and Private Enforcement of Market Abuse 452

Contentsxiv

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9.2.1 Market Abuse Enforcement 4529.2.2 Criminal Law Sanctions and Civil Penalties 4529.2.3 Civil Remedies 4589.2.4 Overdeterrence 4679.2.5 Civil Sanctions or Civil Remedies? 468

9.3 The Development of Civil Remedies for Market Manipulation and Insider Dealing in the US 471

9.3.1 An Implied Remedy 4719.3.2 Vexatious Litigation 473

9.4 The Fraud-on-the-Market Theory 4779.4.1 Causation, Reliance, and the Fraud-on-the-Market Theory 4779.4.2 The US Doctrine of Fraud-on-the-Market 4799.4.3 Implications of the Application of the Fraud-on-the-Market

Presumption 4819.4.4 The Advantages of the Narrow Form of the Fraud-on-the-Market

Presumption 4839.5 The Proposal 486

9.5.1 A Private Right of Action for Market Abuse 4869.5.2 The Scope of the Proposed Right of Action 4899.5.3 Loss Evaluation and Event-Based Studies 492


10. Concluding Remarks and Proposals for Action 496

10.1 An Interdisciplinary Study of Market Abuse: An Overview 49610.2 Conclusions and Proposals 499

10.2.1 Rationales for Regulation 49910.2.2 Proposals 50010.2.3 Protection from Market Abuse in a Polycentric Global Regulatory

System: A New ‘Social Contract’ 502

Index 507

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Table of Cases

European Court of JusticeAlphabeticalAlpine Investments BV v Minister van Financien (Case C–384/93) [1995] ECR I–1141 . . . . . . 242Commission v Germany (Re Insurance Services) (Case 205/84) [1986] ECR 3755 . . . . . . . . . . . 242Commission v Italy (Re Restrictions on Foreign Securities Dealers) (Case C–101/94)

[1996] ECR I–2691 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Gebhard v Consiglio dell’Ordine degle Avocati e Procuratori di Milano (Case C–55/94) [1995]

ECR I-4165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241, 251Keck and Mithouard, Criminal Proceedings against (Cases C–267/91 and 268/91) [1993] ECR

I–6097 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Säger v Dennemeyer & Co Ltd (Case C–76/90) [1991] ECR I–221 . . . . . . . . . . . . . . . . . . . 241, 251Société Civile Immobilière Parodi v Banque H. Albert de Bary et Cie

(Case C–222/95) [1997] ECR I–3899 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Société Generale Alsacienne de Banque v Koestler (Case 15/78) [1978] ECR 1971 . . . . . . . . . 241–2Van Binsbergen v Bestuur van de Bedrijfsvereniging (Case 33/74) [1974] ECR 1299. . . . . . . . . . 241

NumericalCase 33/74 Van Binsbergen v Bestuur van de Bedrijfsvereniging [1974] ECR 1299 . . . . . . . . . . . 241Case 15/78 Société Generale Alsacienne de Banque v Koestler [1978] ECR 1971 . . . . . . . . . . 241–2Case 205/84 Commission v Germany (Re Insurance Services) [1986] ECR 3755. . . . . . . . . . . . . 242Case C–76/90 Säger v Dennemeyer & Co Ltd [1991] ECR I–221 . . . . . . . . . . . . . . . . . . . . . . . . . 241Cases C–267/91 and 268/91 Keck and Mithouard, Criminal Proceedings against

[1993] ECR I–6097. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Case C–384/93 Alpine Investments BV v Minister van Financien [1995] ECR I–1141. . . . . . . . 242Case C–55/94 Gebhard v Consiglio dell’Ordine degle Avvocati e Procuratori di Milano

[1995] ECR I-4165.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241, 251Case C–101/94 Commission v Italy (Re Restrictions on Foreign Securities Dealers)

[1996] ECR I–2691. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Case C–222/95 Société Civile Immobilière Parodi v Banque H. Albert de Bary et Cie

[1997] ECR I–3899. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242

Financial Services and Markets TribunalArif Mohammed v FSA, March 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336

Cases from Other JurisdictionsAustraliaDaly v Sydney Stock Exchange Ltd [1986] 160 CLR 371. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440Hospital Products v United States Surgical Corporation [1983] 2 NSWLR 157 . . . . . . . . . . . . . . 441North v Marra Developments Ltd [1982] 56 ALJR 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317

CanadaPeso Silver Mines v Cropper [1966] SCR 673 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433

European Court of Human RightsBendenoun v France (1994) 18 EHRR 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380Engel v Netherlands (1976) 1 EHRR 647 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380

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Table of Casesxviii

Kokkinakis v Greece (1993) 17 EHRR 397 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380Ravensborg v Sweden (1994) 18 EHRR 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380Saunders v UK (1996) 23 EHRR 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381, 384

New ZealandColeman v Myers [1977] 2 NZLR 297. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434Re Liggett v Kingston (Re Goldcorp) [1993] 1 NZLR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257

UKAaron’s Reefs v Twiss [1896] AC 273 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412–13, 428Aberdeen Railway Co v Blaikie Bros (1854) 1 Macq 461 HL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433Adams v Queen [1995] 1 WLR 52 (PC). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329Agip Africa Ltd v Jackson [1989] 3 WLR 1367, [1990] Ch 265, [1991] Ch 547 (CA),

[1992] 4 All ER 451 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437–9, 441, 445Akerhielm v De Mare [1959] 3 All ER 485 (PC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414Al-Nakib Investments (Jersey) Ltd v Longcroft [1990] 3 All ER 321 . . . . . . . . . . . . . . . . . . . 403, 418Al Saudi Banque [1990] BCLC 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422Andrews v Mockford [1896] 1 QB 372 (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418Angus v Clifford [1891] 2 Ch 449 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414, 420Anns v Merton London Borough Council [1978] AC 728. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421Arab Bank plc v Mercantile Holdings Ltd [1993] BCC 816. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327Arnison v Smith (1889) 41 Ch D 348. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414Atlantic Lines and Navigation Co Inc v Hallam Ltd (The Lucy) [1983] 1 Lloyd’s Rep 188 . . . . . 419Attorney-General for Hong Kong v Reid [1994] 1 AC 324 (PC) . . . . . . . . . . . . . . . . . . . . . . 435, 438Baden Delvaux and Lecuit v Société Générale [1983] BCLC 325 . . . . . . . . . . . . . . . . . . . . . . . . . . 444Bank of Credit and Commerce International (Overseas) Ltd v Akindele

[2000] 4 All ER 221 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 444Bank Tejerat v Hong Kong and Shanghai Banking Corp (CI) Ltd

[1995] 1 Lloyd’s Rep 239 (QBD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437–8Banque Belge pour L’Etranger v Hambrouck [1921] 1KB 321 . . . . . . . . . . . . . . . . . . . . . . . . 437, 439Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1996] 1 AC 191. . . . . . . . . . . . . . . 426Banque Keyser Ullman SA v Skandia (UK) Insurance Co Ltd

[1990] 1 QB 665 (CA), [1991] 2 AC 249 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Barclays Bank v Quistclose Investments [1970] AC 567. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442Barlow Clowes International Ltd (in liquidation) v Vaughan [1992] 4 All ER 22 (CA). . . . . . . . . 440Barnes v Andy (1874) 9 Ch App 244. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443Barry v Croskey (1861) 2 J & H 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 415Bedford v Bagshaw (1859) 4 H & N 538 (Ex); 157 Eng Rep 951 . . . . . . . . . . . . . . . . . . 415–16, 478Belmont Finance v Williams Furniture (No 2) [1980] 1 All ER 393 (CA) . . . . . . . . . . . . . . . . . . . 443Bishopsgate Investment Management Ltd v Homan [1995] Ch 211 . . . . . . . . . . . . . . . . . . . . . . . 438Bisset v Wilkinson [1927] AC 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411Boardman v Phipps [1967] 2 AC 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435Bolkiah v KPMG [1999] TLR 20 April 1999 (HL). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432H.L. Bolton (Engineering ) Co Ltd v T.J. Graham & Sons Ltd [1957] 1 QB 159 . . . . . . . . . . . . . 331Brady v Brady [1988] 2 All ER 617 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326Bray v Ford [1896] AC 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430Bristol and West Building Society v Mothew [1996] 4 All ER 698 . . . . . . . . . . . . . . 430–1, 435, 440Brownlie v Campbell (1880) 5 App Cas 925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414Cackett v Keswick [1902] 2 Ch 456 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412, 477Candler v Crane, Christmas & Co [1951] 2 KB 164. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420Canson Enterprises Ltd v Boughton Co [1991] 3 SCR 534 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436Caparo Industries Ltd v Dickman [1989] QB 653, [1990] 2 AC 605 (HL) . . . . . . . . . . . 403, 422–3

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Central Railway of Venezuela v Kisch (1867) LR 2 HL 99. . . . . . . . . . . . . . . . . . . . . . . . . . . . 174, 415City of Edinburgh Brewery Co Ltd v Gibson’s Trustee (1869) 7 M 886 . . . . . . . . . . . . . . . . . . . . . 411Chase Manhattan Equities v Goodman [1991] BCLC 897 . . . . . . . . . . . . . . . . . . . . . . . . . . . 404, 429Chase Manhattan Bank NA v Israel-British Bank (London) Ltd [1979] 3 All ER 1025 . . . . . . . . 440Chaston v SWP Group Ltd [2003] 4 Current Law 78. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327Charterhouse Investment Trust Ltd v Tempest Diesels Ltd [1986] BCLC 1 . . . . . . . . . . . . . . . . . . 326Clark v Urquhart, Stracey v Urquhart [1930] AC 28. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419Cleaver v Mutual Fund Life Association [1892] 1 QB 147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429Clough v London and North Western Railway (1871) LR 7 Ex 26 . . . . . . . . . . . . . . . . . . . . . . . . . 428Coles v White City (Manchester) Greyhound Association (1928) 45 TLR 230 . . . . . . . . . . . . . . . 428Cowan de Groot Properties Ltd v Eagle Trust plc [1992] 4 All ER 700 . . . . . . . . . . . . . . . . . . . . . . 444Davies v London and Provincial Co (1878) 8 Ch D 469 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412–13Derry v Peek (1889) 14 App Cas 337 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414, 416–17, 478Doyle Ltd v Olby (Ironmongers) Ltd [1969] 2QB 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418–19Donoghue v Stevenson [1932] AC 562. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420Dorset Yacht Co Ltd v Home Office [1970] AC 1004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421Downs v Chappel [1996] 3 All ER 344. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419Eagle Trust plc v SBC Securities Ltd [1992] 4 All ER 488 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443–4East v Maurer [1991] 2 All ER 733 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419Edgington v Fitzmaurice (1885) 29 Ch D 459 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414El Ajou v Dollar Land Holdings [1993] BCLC 735, [1993] 3 All ER 717,

[1994] 1 BCLC 464 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331, 437–9, 444El Ajou v Dollar Land Holdings (No 2) [1994] 2 All ER 685 (CA), [1995] 2 All ER 213. . . . . . . 439Erlanger v New Sombrero Phosphate Co (1878) 3 App Cas 1218 . . . . . . . . . . . . . . . . . . . . . . . . . . 428Esso v Mardon [1976] 2 WLR 583 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422, 425Eves v Eves [1975] 1 WLR 1338 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438Euro-Diam v Bathurst [1988] 2 All ER 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429Ex parte Dale & Co (1879) 11 Ch D 772. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441Fletcher v Krell (1872) 42 LJQB 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Fraser v Evans [1969] 1 QB 349. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435Grupo Torras SA v Al-Sabah [1999] CLC 1469. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442Guinness plc v Saunders [1990] 2 AC 663, HL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433, 500Gulf Oil (GB) Ltd v Page [1987] Ch 327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329Hadley v Baxendale (1854) 9 Ex 341. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418Heald v O’Connor [1971] 1 WLR 497. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 327Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] All ER 577,

[1964] AC 465 HL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417, 420–1Heinl v Jyske Bank (Gibraltar) Ltd [1999] Lloyd’s Rep Bank 511 . . . . . . . . . . . . . . . . . . . . . . . . . . 443Henderson v Merrett Syndicates [1994] 3 All ER 506, [1995] 2 AC 145. . . . . . . . . . . . . . . . 424, 431Huggins (1730) 2 Stra 883 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331Industrial Development Consultants v Cooley [1972] 1 WLR 443. . . . . . . . . . . . . . . . . . . . . . . . . 433James McNaughton Paper Group v Hicks Anderson & Co [1990] 2 QB 11 (CA) . . . . . . . . . . . . 424Jones (FC) & Sons (Trustees) v Jones [1996] 3 WLR 703. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437Kamara v DPP [1974] AC 104 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329Karak Rubber Co v Burden (No 2) [1972] 1 WLR 602 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440Keates v Cadogan (1851) 10 CB 591 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Keech v Sandford (1726) Sel Cas Ch 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430Kelly v Cooper [1992] 3 WLR 936, [1992] AC 205. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432, 441Koufos v Czarnikow (Heron II) [1969] 1 AC 350 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 418Le Lievre v Gould [1893] 1 QB 491 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414, 420Lennon v Commissioner of Police of the Metropolis [2004] EWCA Civ 130 . . . . . . . . . . . . . . . . 425Lipkin Gorman v Karpnale Ltd [1991] 3 WLR 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437–8, 444

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Lister & Co v Stubbs (1890) 45 Ch D 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435Lloyds Bank Ltd v Bundy [1975] QB 326 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430Lloyds Bank v Ergemont [1990] 2 FLR 351. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Lonrho v Fayed (No 2) [1992] 1 WLR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412, 477Mahesan v Malaysian Government Officers’ Co-operative Housing Society Ltd

[1979] AC 374 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436Mair v Rio Grande Rubber Estates Ltd (1913) SC 74 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428Manchester Trust v Furness [1895] 2 QB 539 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438McConnel v Wright [1903] 1 Ch 546. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419McKeown v Boudard Peveril Gear Co Ltd (1896) 74 LT 712 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Meridian Global Funds Management Asia Ltd v Securities Commission

[1995] 3 WLR 413 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331Melton Medes Ltd v Securities and Investments Board [1995] 2 All ER 880 . . . . . . . . . . . . . . . . . 394Miza Mohamet Tackey v R.S.F. McBain (1912 ) AC 186 (PC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414Moorgate Mercantile Co Ltd v Twitchings [1976] 2 All ER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Morgan Crucible Co v Hill Samuel & Co [1990] 2 QB 11 (CA), [1991] Ch 295. . . . . . . . . 403, 424Murphy v Brentwood DC [1990] 3 WLR 414. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421Mutual Life v Evatt [1971] AC 793 (PC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421–2New Brunswick and Canada Railway v Conybeare (1862) 9 HLC 711 . . . . . . . . . . . . . . . . . . . . . 416New Brunswick and Canada Railway Co v Muggeridge (1860) 1 Dr & Sm 381,

4 H & N 160, 157 Eng Rep 798 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174, 415–16Nocton v Ashburton [1914] AC 932. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 414, 420, 435, 441Oakes v Turquand (1867) LR 2 HL 325 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Orakpo v Manson Investments Ltd [1978] AC 95. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436Overseas Tankship (UK) Ltd v Morts Dock (The Wagon Mound) [1961] AC 388 . . . . . . . . . . . . 425Parker v McKenna (1874) LR 10 Ch App 96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430Pasley v Freeman (1789) 3 Durn & E 51, [1775–1802] All Rep 31. . . . . . . . . . . . . . . . . . . . . . . . . 413Peek v Gurney (1873) LR 6 HL 377 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403, 411, 413, 416, 478Percival v Wright [1902] 2 Ch 421 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434Philips Products Ltd v Hyland [1987] 2 All ER 620 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427Polly Peck International v Nadir (No 2) [1992] 4 All ER 769 . . . . . . . . . . . . . . . . . . . . . . . 441, 443–4Possfund Custodian Trustee Ltd and another v Diamond et al [1996] 2 All ER 774 . . . . . . 403, 418, 425Prudential Assurance v Newman Industries Ltd (No 2) [1980] 2 All ER 841. . . . . . . . . . . . . . . . . 431R (on the application of Fleurose) v Securities and Futures Authority Ltd

[2001] 2 All ER (Comm) 481 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381R v Allsop (1977) 64 Cr App R 29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330R v Aspinall (1875) 1 LR 730 (QBD), (1876) 2 LR 48 (QBD) . . . . . . . . . . . . . . . 104, 113, 140, 478R v Ayres [1984] 1 All ER 619 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329R v Clowes (No 2) [1994] 2 All ER 316 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331, 388R v Cohen et al CA (CD), The Independent 29 July 1992, The Times 9 October 1992;

(1992) NLJ 1267 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114, 330, 385, 454–5R v Cooke [1986] 2 All ER 985 (HL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329R v De Berenger (1814) 3 M&S 67 (KB), 105 Eng Rep 536. . . . . . . . . 104, 113, 122, 328, 416, 478R v Finnegan, The Independent, 27 November 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315R v Ghosh [1982] QB 1053, [1982] 2 All ER 689 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315, 330R v Goodman [1993] 2 All ER 789, CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323R v Grunwald [1963] 1 QB 935 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315R v Kylsant [1932] 1 KB 442. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314, 413R v Landy [1981] 1 All ER 1172. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329–30R v Lyons et al [2002] UKHL 44, [2002] 2 Cr App R 210 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381R v Markus [1976] AC 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316

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R v Page [1996] Crim LR 821 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315R v Panel on Take-overs and Mergers, ex p Datafin plc [1987] QB 815. . . . . . . . . . . . . . . . . . . . . . 228R v Panel on Take-overs and Mergers, ex p Guinness plc [1990] 1 QB 146 . . . . . . . . . . . . . . . . 227–8R v Quin [1978] Crim LR 750; R v Walters (1979) 69 Cr App Rep 115, CA. . . . . . . . . . . . . . . . . 329R v Saunders and others [1996] 1 Cr App R 463 (CA) . . . . . . . . . . . . . . . . . . 147, 330, 455, 456, 500R v Scott [1975] AC 819 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329R v Spens [1991] 4 All ER 421 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455R v Walters (1979) 69 Cr App Rep 115, CA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329Re Burney [1892] 2 Ch 265 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 440Re Chez Nico (Restaurants) [1992] BCLC 192 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 434Re Christinenville Rubber Estates [1911] WN 216. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412Re City Equitable Fire Insurance Co Ltd [1925] Ch 407 (Ch D) . . . . . . . . . . . . . . . . . . . . . . 431, 433Re Diplock’s Estate, Diplock v Wintle [1948] 2 All ER 318 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441Re Goldcorp Exchange [1995] 3 WLR 199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441–2Re Halett’s Estate (1880) 13 Ch D 696. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 439Re Lands Allotment Co [1894] 1 Ch 616. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 432Re London & Globe Finance Corporation Ltd [1903] 1 Ch 728. . . . . . . . . . . . . . . . . . . . . . . . . . . 330Re Mount Morgan (West) Gold Mines Ltd (1887) 3 TLR 556 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429Re Polly Peck (No 2) [1998] 3 All ER 812 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 442Re Scottish Petroleum Co (1883) 23 Ch D 413. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428Re Wait [1927] 1 Ch 606 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438Regal (Hastings) Ltd v Gulliver [1942] 1 All ER 378 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 443–4, 462Royscott Trust Ltd v Rogerson [1991] 3 All ER 294 (CA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426Rubery v Grant (1872) 13 LR Eq 443 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122, 130, 318S. Pearson & Son Ltd v Dublin Corporation [1907] AC 351 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419Salaman v Warner [1891] 64 TLRNS 598 (QBD), [1891] 7 TLR 484 (CA) . . . . . . . . . 416–18, 478Scott v Brown, Doering, McNab & Co [1892] 2 QB 724 (CA). . . . . . . . . . 104, 114, 130, 318, 418,

429, 489Scott v Commissioner of Police for the Metropolis [1974] 3 All ER 1032 . . . . . . . . . . . . . . . . . . . 330Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 1WLR 1555. . . . . . . . . 327, 440, 443SIB v Pantell SA (No 2) [1993] BCLC 146 (CA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375Smissen v Derry, The Times, 29 October 1887; 20–21 November 1889 . . . . . . . . . . . . . . . . . . . . 416Smith v Chadwick (1882) 20 Ch D 27, (1884) 9 App Cas 187 . . . . . . . . . . . . . . . . . . . . 412–14, 477Smith v Eric Bush [1990] 1 AC 831 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423, 427Smith v Land & House Property Corp (1884) 28 Ch D 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412Smith New Court v Scrimgeour Vickers (Asset Management) Ltd

[1996] 4 All ER 225, [1996] 4 All ER 769 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419, 426, 429, 460Spence v Crawford [1939] 3 All ER 271 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428Spring v Guardian Assurance plc [1994] 3 All ER 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424Swindle v Harrison [1997] 4 All ER 705. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435Target Holdings Ltd v Redferns [1995] 3 WLR 352 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436Tarling No. 1 v Government of Singapore (1980) 70 Cr App R 77 . . . . . . . . . . . . . . . . . . . . . . . . . 106Taylor v Plumer (1815) 3 M & S 562 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437Tesco Supermarkets v Nattrass [1972] AC 153 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331Thomas Witter Ltd v TBP [1996] 2 All ER 573 (Ch D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 420, 427Turner v Green [1895] 2 Ch 205 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Twinsectra Ltd v Yardley [1999] Lloyd’s Rep Bank 438, [2002] 2 All ER 377 . . . . . . . . . . . . . . . . 442Twycross v Grant (1877) 2 CPD 469. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417, 419, 428Waddell v Blockey (1879) 4 QBD 678 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 419Wai Yu-Tsang v R [1992] 1 AC 269 (PC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329Wales v Wadham [1977] 1 WLR 199 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412

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Table of Casesxxii

Welham v Director of Public Prosecutions [1961] AC 103. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330Westdeutsche Landesbank Girozentrale v Islington BC [1996] 2 All ER 961,

[1996] 2 WLR 802 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441–2White v White [1950] P 39, [1949] 2 All ER 339, CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460William Sindall plc v Cambridgeshire CC [1994] 3 All ER 932 (CA)With v O’Flanagan [1936] Ch 575 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 412Whelpdale v Cookson (1747) 1 Ves Sen 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430White v Jones [1995] 2 WLR 187, [1995] 2 AC 206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424, 441X (Minors) v Bedfordshire CC [1995] 2 AC 633. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394Yianni v Edwin Evans & Sons [1982] 1 QB 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421

United StatesCommodity Futures Trading CommissionIn the Matter of Cox [1982–84 Transfer Binder] Commodity Futures Law Reporter (CCH)

21,767(CFTC Initial Decision 1983). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Re Global Minerals & Metals Corp and Merrill Lynch & Co

[1998–99 Transfer Binder] Commodity Futures Law Reporter (CCH) 27,649 . . . . . . . . . . . . 151Re Indiana Farm Bureau Cooperative Association [1982–84 Transfer Binder] CCH Commodity

Futures Law Reporter (CCH) 21,796 (CFTC, 1982) . . . . . . . . . . . . . . . . . . . . . . . . . 109, 116, 148Re Sumitomo Corp [1996–98 Transfer Binder] Commodity Futures Law Reporter

(CCH) 27,327. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

Securities and Exchange CommissionRe Cady, Roberts & Co 40 SEC 907 (1961) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178, 197Affiliated Ute Citizens v US 406 US 128 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479–80Basic v Levinson 485 US 224 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 48, 480–3, 485, 505Bateman Eichler, Hill Richards, Inc v Berner 472 US 299 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . 467Blackie v Barrak 524 F 2d 891, 902 (9th Cir 1975) cert denied, 429 US 816 . . . . . . . . . . . . 479, 481Blue Chip Stamps v Manor Drug Stores 421 US 723 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472Bryant v Avado Brands, Inc 187 F 3d 1271 (11th Cir 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475Cargil, Inc v Hardin 452 F 2d 1154 (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105, 150, 153Carpenter v US 484 US 19 (1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78, 178Central Bank of Denver, NA v First Interstate Bank of Denver, NA 11 S Ct 1439,

511 US 164 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464, 472Chiarella v US 445 US 222 (1980). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79, 178, 198Cort v Ash 422 US 66 (1975). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472Crane v Westinghouse Air Brake Co 419 F 2d 787 (2d Cir 1969) . . . . . . . . . . . . . . . . . . . . . . . . . . 147David G. Henner 30 Agric Dec 1151 (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107, 111Diamond v Oreamuno 24 NY 2d 494 (1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 433Dirks v SEC 463 US 646 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Ernst & Ernst v Hochfelder 425 US 185 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107Ganino v Citizens Utils Co 228 F 3d 154 (2d Cir 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481GH Millier & Co v US 260 F 2d 286 (7th Cir 1958) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110–11, 141Great Western Distributors, Inc v Brannan 201 F 2d 476 (7th Cir 1953) . . . . . . . . . . . . . . . 109, 150Greebel v FTP Software, Inc 194 F 3d 185, 196 (1st Cir 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475Gutfreund et al v Weiner et al (In re Salomon Brothers Inc, Shareholders’

Derivative Litigation) 68 F 3d 554 (2d Cir 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152Harris v US 48 F 2d 771 (9th Cir 1931) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114, 140H.F. Ahmanson & Co. v Salomon Brothers Inc 229 Cal App 3d 1445 (2nd Dist 1991). . . . . . . . 152Herman & MacLean v Huddleston 459 US 375, 380 (1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472J.I. Case Co v Borak 377 US 426, 432 (1964) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467, 472Kaplan v Rose 49 F 3d 1363 (9th Cir 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481

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Kardon v National Gypsum Co 69 F Supp 512 (ED Pa 1946). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472Korwek v Hunt 827 F 2d 874 (2d Cir 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112Laidlaw v Organ (1817) 15 US (2 Wheat) 178 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 413Lampf, Pleva et al v Gilbertson 501 US 350 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 464, 467Mills v Electric Autolite Co (1970) 396 US 375 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479Minpeco SA v Conticommodity Services, Inc 832 F 2d 739, 740 (2d Cir 1987) . . . . . . . . . . . . . . 112Mobil Corp v Marathon Oil Co 669 F 2d 366 (6th Cir 1981). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146Newby v Enron Corporation 2002 WL 31854963 (SD Tex 20 Dec. 2002) . . . . . . . . . . . . . . . . . . . . 8O’Hagan v US 521 US 642 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78, 199Peil v Speiser 806 F 2d 1154 (3d Cir 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 480Press v Chemical Inv Serv Corp 166 F 3d 529, 538 (2d Cir 1999) . . . . . . . . . . . . . . . . . . . . . . . . . 475Re Advanta Corp Sec Litig 180 F 3d 525 (3d Cir 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475Re Comshare, Inc Sec Litig 183 F 3d 542, 551 (6th Cir 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475Re Silicon Graphics Inc Sec Litig 183 F 3d 970, 974 (9th Cir 1999). . . . . . . . . . . . . . . . . . . . . . . . 475Re Sumitomo Copper Litigation 74 F Supp 2d 393 (SDNY 1999) . . . . . . . . . . . . . . . . . . . . . . . . . 152Re Time Warner Inc Sec Litig 9 F. 3d 259, 269 (2d Cir 1993) cert denied,

114 S Ct 1397 (1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475Ross v A.H. Robins Co 607 F 2d 545, 558 (2d Cir 1979) cert denied, 446 US 946 (1980) . . . . . 475Santa Fe Industries, Inc v Green 430 US 462, 477 (1977) . . . . . . . . . . . . . . . . . . . . . . . . . . 104–5, 107Schlanger v Four Phase Systems Inc 555 F Supp 535 (SDNY 1982) . . . . . . . . . . . . . . . . . . . . . . . . 505Schreiber v Burlington Northern, Inc 472 US 1 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114SEC v Texas Gulf Sulphur Co 401 F 2d 833 (2d Cir 1968) cert denied, 394 US 976 (1969) . . . . 197Shores v Sklar 647 F 2d 462 (5th Cir en banc 1981) cert denied, 459 US 1102. . . . . . . . . . . . . . . 479Superintendent of Insurance v Bankers Life & Casualty Co 404 US 6 (1971) . . . . . . . . . . . . . . . . 472Ultramares Corporation v Touche 255 NY 170 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423US v Brown 5 F Supp 81 (SDNY 1933), 79 F 2d 321 (2d Cir 1935) . . . . . . . . . . . . . . . . . . . . . . . 114US v Charnay 577 F 2d 81 (9th Cir 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147US v Milken 759 F Supp 109 (SDNY 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145US v Mulheren 938 F 2d 364 (2d Cir 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146US v Newman, 664 F 2d 12 (2d Cir 1981) cert denied, 464 US 863 (1983) . . . . . . . . . . . . . . . . . . 78US v Willis, 737 F Supp. 269 (SDNY 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78, 199Vincent W. Kosuga 19 Agric Dec 603 (1960). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Volkart Bros, Inc v Freeman 311 F 2d 52 (5th Cir 1962) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107, 111

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Table of Treaties, European LegislativeInstruments, and National Legislation

EC Treaties and ConventionsEC Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

EEC Treaty (Treaty of Rome) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

Art 202 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247EU Constitutional Treaty

Art I-35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250European Convention on Human Rights (ECHR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311

1st Protocol

Art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380

(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383Art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380

Single European Act (SEA). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

TEU Treaty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305

EC DecisionsCouncil Decision 1999/468/EC of 28 June 1999 laying down the procedures for the exercise ofimplementing powers conferred on the Commission [1999] OJ L184/23 . . . . . . . . . . . . . . . . . . . 247

Commission Decision of 6 June 2001 establishing the European Securities Committee2001/528/EC [2001] OJ L191/45. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248

Commission Decision of 6 June 2001 establishing the Committee of European SecuritiesRegulators 2001/527/EC [2001] OJ L191/43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248

Commission Decision of 5 November 2003 amending Decision 2001/528/EC establishing theEuropean Securities Committee 2004/8/EC [2004] OJ L003/33 . . . . . . . . . . . . . . . . . . . . . . . . . . 248

Commission Decision of 5 November 2003 amending Decision 2001/527/EC establishing theCommittee of European Securities Regulators 2004/7/EC [2004] OJ L003/32. . . . . . . . . . . . . . . 248

Commission Decision of 5 November 2003 amending Decision 2001/528/EC establishing theEuropean Securities Committee 2004/8/EC [2004] OJ L003/33 . . . . . . . . . . . . . . . . . . . . . . . . . . 249

Commission Decision of 5 November 2003 amending Decision 2001/527/EC establishing theCommittee of European Securities Regulators 2004/7/EC [2004] OJ L003/32 . . . . . . . . . . . . . . 249

EC DirectivesDirective 77/91/EEC on the coordination of safeguards which, for the protection of the interests of members and others, are required by Member States of companies within the meaning of thesecond paragraph of Art 58 of the Treaty, in respect of the formation of public limited liabilitycompanies and the maintenance and alteration of their capital, with a view to making suchsafeguards equivalent (2nd Company Law Directive) [1977] OJ L26/1 . . . . . . . . . . . . . . . . . . . 280–1

Art 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281

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Art 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280Art 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280Art 22 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280Art 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280Art 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280

Directive 79/279/EEC coordinating the conditions for the admission of securities to official stockexchange listing (Admissions Directive) [1979] OJ L066/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Directive 80/390/EEC coordinating the requirements for the drawing-up, scrutiny and distributionof the listing particulars to be published for the admission of securities to official stock exchangelisting (Listing Particulars Directive) [1980] OJ L100/1 . . . . . . . . . . . . . . . . . . . . . 169, 244, 302, 397

Directive 82/121/EEC on the information to be published on a regular basis by companies theshares of which have been admitted to official stock exchange listing (Interim Reports Directive)[1982] OJ L048/26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Directive 88/627/EEC on the information to be published when a major holding in a listed company is acquired or disposed of (Substantial Shareholding Directive) [1988] OJ L348/62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Directive 89/298/EEC coordinating requirements for the drawing up, scrutiny and distribution of the prospectus when transferable securities are offered to the public (Public Offers Prospectus Directive) [1989] OJ L124/8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169, 244, 302, 397

Directive 89/299/EEC on the own funds of credit institutions (Own Funds Directive) [1989] OJ L124/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Directive 89/592/EEC coordinating regulations on Insider Dealing (Insider Dealing Directive)[1989] OJ L334/30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197, 244, 250, 307, 312

Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178Art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253Art 2

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252, 322Directive 89/646/EEC on the coordination of the laws, regulations and administrative proceduresrelating to the taking up and pursuit of the business of credit institutions and amending Directive77/780 (Second Banking Coordination Directive) [1989] OJ L386/1 . . . . . . . . . . . . . . . . . . . . . . 244

Directive 89/647/EEC on a solvency ratio for credit institutions (Solvency Ratio Directive) [1989] OJ L386/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Directive 92/121/EEC on large exposures (Large Exposures Directive) [1992] OJL 29/1. . . . . . . 244

Directive 93/22/EEC of 10 May 1993 on investment services in the securities field (Investment Services Directive, or ISD) [1993] OJ L141/27 . . . . . . . . . . . . . . . . . . . . . . . . . . 240, 244

Directive 93/6/EEC of 15 March 1993 on the capital adequacy of investment firms and creditinstitutions (Capital Adequacy Directive, or CAD) [1993] OJ L141/1 . . . . . . . . . . . . . . . . . . . . . . 244

Directive 98/26/EC on settlement finality in payment and securities settlement systems [1998] OJ L166/45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246

Directive 98/27/EC on injunctions for the protection of consumers’ interests (InjunctionsDirective) [1998] L166/51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476

Directive 2000/12/EC relating to the taking up and pursuit of the business of credit institutions(Consolidated Banking Directive) [2000] OJ L126/1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (Market Abuse Directive) [2003] OJ L96/16. . . . . . . . . . 10, 17, 75–7, 103, 148, 156, 239, 251, 255, 307, 397, 450, 486, 498

PreambleRecital 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251Recital 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251, 291

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Table of European Treaties, Instruments, and National Legislation xxvii

Recital 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253Recital 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255, 257Recital 17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253Recital 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253, 261, 345–6, 458Recital 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254Recital 20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278Recital 24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266Recital 26. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267Recital 27. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288Recital 29 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261, 346Recital 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260–2, 345Recital 31. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256Recital 33 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279, 340Recital 38. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458

Art 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253–5, 258, 336(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 107–8, 118, 148, 276–7, 354, 361, 450, 486–7

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133, 277–8, 334, 349, 487, 489(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128, 279, 334, 487(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106, 278, 334, 340, 355, 487

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262, 339(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259

Art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77, 196–7, 252–3, 261, 333, 486(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252–3, 335(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253, 260(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335

Art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 196–7, 252–3, 261, 486(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252–3, 262, 333(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196, 252–3, 486Art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105Art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 138, 169, 197, 255–6, 263, 265, 397(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197, 264–5, 362(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197, 265–6, 363–4(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266–7, 364(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 170, 217, 267–70, 272, 292, 294, 301, 311, 360(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 288, 292, 294(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288, 292, 360, 367

Art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260, 279–80, 340Art 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262, 265Art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292Art 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290Art 12

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

Art 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290Art 14

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290, 458(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

Art 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290

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Art 16(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 292(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291

Directive 2003/124/EC of 22 December 2003 implementing Directive 2003/6/EC on the definition and public disclosure of inside information and the definition of market manipulation (Directive on the Public Disclosure of Inside Information) [2003] OJ L339/70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105, 128, 239, 255, 258, 307, 335, 349, 397

PreambleRecital 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264

Art 1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257, 336(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258, 336

Art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255, 264, 361(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264

Art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105, 278, 351Art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105, 107, 128, 279Art 6(1)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366

Directive 2003/125/EC of 22 December 2003 on the fair presentation of investmentrecommendations and the disclosure of conflicts of interest (Directive on the Fair Presentation of Research and Disclosure) [2003] OJ L339/073 . . . . . . . . . . . . . . 217, 239, 269–76, 301, 307, 311

Recital 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270Recital 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275Recital 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269Recital 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270Art 1

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270

Art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270, 275–6(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270, 275–6

Art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271, 275–6

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272–3, 275–6(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272

Table of European Treaties, Instruments, and National Legislationxxviii

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xxviii

Table of European Treaties, Instruments, and National Legislation xxix

Art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272, 275–6(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 273

Art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275Art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275–6Art 9

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276

Directive 2003/71 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC (Public Offers and AdmissionsProspectus Directive) [2003] OJ L345/64 . . . . . . . . . . . . . . . . . . . . . 17, 169, 239–40, 287, 302, 397

PreambleRecital 18. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302Recital 19. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302Recital 20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 302

Art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287Art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169, 303(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303

(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303

Art 6(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303

Art 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303Annex I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303Annex III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303

6.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287Annex X

30.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28730.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28730.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28730.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28730.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287

Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on financial instruments markets, amending Directives 85/611/EEC and 93/66/EEC of the EuropeanParliament and of the Council and Directive 2000/12/EC of the European Parliament and repealing Directive 93/22/EEC (MiFID) [2004] OJ L145/1 . . . . . . . . . . . . . 175, 239, 289, 339, 432

PreambleRecital 50. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299Recital 51. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301Art 14

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Art 18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xxix

Art 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296, 299–300(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300

Art 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296Art 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298–9(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 298Art 22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296–7

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297Art 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297Art 25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296Art 26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296Art 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193, 296, 298

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299

Art 28 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193, 289

Art 29. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 194, 289

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289

(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289Art 30. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194, 289

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 289(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289

Art 32(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300

Art 37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226Art 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226Art 39. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 289Art 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226Art 41. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 289Art 42. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226, 289

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28Art 43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226Art 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175, 194, 226

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289

Art 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175, 194, 226

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 289Annex I

Section A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Section B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301Section C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262

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Annex II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300Directive 2004/25/EC of 21 April 2004 on takeover bids [2004] OJ L142/12 . . . . . . . . . . . 240, 261

PreambleRecital 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

Art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261

Directive 2004/72/EC of 29 April 2004 implementing Directive 2003/6/EC on accepted marketpractices, the definition of inside information in relation to derivatives on commodities, the drawingup of lists of insiders, the notification of managers’ transactions and the notification of suspicioustransactions (Accepted Practices Directive) [2004] OJ L162/70). . . . . . . . . . 239, 307, 335, 354, 367

PreambleRecital 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259Recital 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259Recital 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259Recital 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267

Art 1(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367

Art 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259–60

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254Art 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267, 361Art 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267, 361Art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288Art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288Art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288Art 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288

Directive 2004/109/EC of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (Transparency Directive)[2004] OJ L390/38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 20, 169, 217, 239, 265, 304

Art 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169, 304(2)

(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304Art 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169, 304Art 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304

Art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304

Art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169Art 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304Art 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

EC RecommendationsEuropean Code of Conduct relating to transactions in transferable securities—CommissionRecommendation 77/534/EEC of 25 July 1977 concerning a European Code of Conduct relatingto transactions in transferable securities [1977] OJ L212/37 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

Annex . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

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EC RegulationsRegulation (EC) 1606/2002 of 19 July 2002 on the application of international accountingstandards [2002] OJ L243/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240

Regulation (EC) of 22 December 2003 implementing Directive 2003/6/EC on exemptions for buy-back programmes and stabilisation of financial instruments (Regulation on Share Buy-backsand Stabilisation) [2003] OJ L336/33. . . . . . . . . . . . . 140–1, 239, 260, 279–88, 307, 312, 316, 340

PreambleRecital 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280, 285Recital 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280Recital 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283Recital 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285

Art 2(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284, 287(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284(12). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285(13). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284(14). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284

Art 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 280Art 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 281

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281

Art 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 281(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 281(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

Art 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 281(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282

Art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284Art 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 284, 288

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 285(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286

Art 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 284, 286(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286–7(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287

Art 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 284, 286(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 286

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Art 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141, 284, 287(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287

Regulation (EC) 809/2004 of 29 April 2004 implementing Directive 2003/71/EC as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements [2004] OJ L149/1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190, 287, 302–3

Draft LegislationCommon Position (EC) No 9/2004 of 8 December 2003 adopted by the Council, acting in accordance with the procedure referred to in Art 251 of the Treaty establishing the European Community, with a view to adopting a directive on financial instrumentsmarkets, amending Directives 85/611/EEC and 93/6/EEC and Directive 2000/12/EC, andrepealing Directive 93/22/EEC [2004] OJ C060E/1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240

Proposal for a Directive on investment services and regulated markets and amending Directive85/11/EEC, Directive 93/6/EEC, and Directive 2000/12/EC, COM(2002)625 . . . . . . . . . . . . . 240

National LegislationBELGIUMCivil Code

art 1382 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294Companies Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294

art 203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294Penal Code

art 311 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294

FRANCECivil Code

art 1382 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294art 1383 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294

GERMANYCivil Code (BGB) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

s 431 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293s 823 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294–5s 826 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

Securities Sales Prospectus Law of 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

art 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293Securities Trading Act 1994—Wertpapierhandelsgesetz (WpHG). . . . . . . . . . . . . . . . . . . . . . . . . . . 293

s 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293s 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294s 32 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294

Stock Exchange Law (BörsG) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

art 45(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xxxiii

art 46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293art 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293art 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

IRELANDCompanies Act 1990. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

s 109(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 293

SPAINCivil Code arts 1,902 et seq.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294

UKSTATUTES

Act to Prevent the Infamous Practice of Stock-Jobbing of 1734 (Barnard’s Act) . . . . . . . . . 314, 389

Act to Restrain the Number and Ill Practice of Brokers and Stockjobbers of 1697 . . . . . . . . . . . 314

Banking Act 1987 (repealed by FSMA 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309

s 35(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315

Bubble Act of 1720 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314

Building Societies Act 1986 (partly repealed by FSMA 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309

Companies Act 1867 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

s 38 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174Companies Act 1900 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174, 396

s 10(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174Companies Act 1946

s 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326Companies Act 1980 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486

Companies Act 1985s 67 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403s 151. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326–7

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326s 152

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326s 153. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326–7s 154 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326s 155 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326s 156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326s 157 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326s 158 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326s 324 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364s 346 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364s 438 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

Company Directors Disqualification Act 1986s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323

Companies Securities (Insider Dealing) Act 1985 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429

Criminal Justice Act 1987 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383s 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

Table of European Treaties, Instruments, and National Legislationxxxiv

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Table of European Treaties, Instruments, and National Legislation xxxv

s 12(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329

Criminal Justice Act 1993Part V (ss 52–64) . . . . . . . . . . . . . . . . 310, 312, 320, 322–4, 328, 332, 338, 368–9, 384, 452, 498s 52 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196, 320–1, 323–4,

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321

s 53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322(1)

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

(2)(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322s 54 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322s 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321

(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321

s 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321s 57

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320

s 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321(2)

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

s 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320s 60

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321s 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323s 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324Sch 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323Sch 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

Criminal Law Act 1997s 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329s 5

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329

Directors’ Liability Act 1890 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396, 417

Financial Services Act 1986 (repealed by FSMA 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309, 486

s 47 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xxxv

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314, 316, 318–19(4)

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316s 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324s 57 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324s 58 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325s 62 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391, 393, 471

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

s 62A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391, 471s 150. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402, 479s 166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403s 179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394

Financial Services and Markets Act 2000 (FSMA 2000). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307–9

s 2(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309, 377

s 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166s 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324–5, 328, 405–9

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 404, 406(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405, 410(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407, 410(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406(13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325, 406

s 22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166, 406s 25

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325s 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407

s 55 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382Part 6 (ss 72–103) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345, 359–60, 395–6, 398–9, 403s 73A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360, 392, 397–8

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360–1, 398s 79. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396, 398s 80. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165, 400

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399

s 81. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399–400(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399

s 82 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399

s 84. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396, 398

Table of European Treaties, Instruments, and National Legislationxxxvi

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Table of European Treaties, Instruments, and National Legislation xxxvii

s 85(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396, 404(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396

s 86(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399s 87. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398, 404

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396

s 90 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391–2, 402–3, 498

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400–3, 479(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

s 91 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398s 96A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359, 397

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364(f ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364

s 96B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359, 397(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365

s 96C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359, 362, 397s 98

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405, 428

Part 8 (ss 118–31A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345s 118 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17, 75–7, 103, 107, 118, 165, 307, 310–12, 327, 332–3,

335, 338–41, 357–9, 369, 375, 387, 390–1, 393, 410, 444, 452, 458, 498(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333, 338–9, 342, 391, 394, 445, 450, 486–7

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333, 338–9, 342, 348, 391, 394, 445, 486–7(4). . . . . . . . . . . . . . . . . . . . . . 140, 312, 337, 339, 342–3, 345, 388, 391, 393, 445, 450, 486–7

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334

(5) . . . . . . . . . . . . . . . . . . . . . . . . . . 133, 334, 338–9, 349, 358, 394, 418, 444, 450, 486–7, 489(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140, 350–1

(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128, 334, 338, 349, 355, 358, 418, 444, 450, 486–7(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334, 338–9, 349, 356, 358, 418, 444, 450, 486–7(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312, 337, 339, 345, 349, 357–8, 388, 418, 444, 450

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 334

(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312, 334, 337s 118A

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xxxvii

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338(iii). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 338

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340, 359(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340

s 118B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335s 118C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335–6, 361, 394

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336, 340, 354(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337

s 119 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

s 120 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395s 122 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

s 123 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310, 371, 375, 378, 381, 452, 458(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335, 358(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372, 375(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375

s 124 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378

s 126 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378s 127 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378, 382s 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373, 377

s 130A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335, 338(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332–3, 335(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340

s 131A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368Part 9 (ss 132–7)s 132. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378, 382s 133

(1)(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

Table of European Treaties, Instruments, and National Legislationxxxviii

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xxxviii

Table of European Treaties, Instruments, and National Legislation xxxix

(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378s 134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383s 135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383s 136 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383s 137

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383Part 10 (ss 138–64) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393s 138

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395s 143

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395s 150. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392–3, 395, 402, 425, 445, 471, 498

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391–4(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393, 488(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

s 157 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341Part 11 (ss 165–77)s 165 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368–9(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369

s 166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368s 167 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368s 168 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369, 370(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370

s 169 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368s 170

(3)(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370

(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369s 174

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381

s 177 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371

Part 12 (ss 178–92)s 179 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394Part 14 (ss 205–11)s 205 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377Part 15 (ss 212–24)s 214 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xxxix

s 215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411Part 16 (ss 225–34) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409s 225 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409s 226. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409–10

(2)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409–10s 227. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409–10

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410

s 228 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410

s 229 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

Part 17 (ss 235–84)s 284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368Part 18 (ss 285–301)s 285 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378s 286 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378Part 25 (ss 380–6)s 380 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371s 381. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310, 373

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371

s 382. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 312, 373s 383 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373, 436, 476

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373, 374(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 373

s 384 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310–12, 436, 491(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375, 452, 458, 476(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375, 452, 458, 476(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375

Part 27 (ss 397–403)s 397 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75, 103, 105, 115, 118, 165, 307, 316, 328, 332, 338,

357, 368–70, 375, 383, 390, 410, 418, 444, 450, 452, 498 (1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 314–16, 318

(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 318(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 107, 314–18(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103, 106–7, 133, 316–19, 327, 393

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Table of European Treaties, Instruments, and National Legislation xli

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316, 319(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315(13). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315

s 400 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332s 401 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371, 383, 384

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384s 402. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323, 384

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383Sch 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406

Pt I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 340Sch 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396, 398Sch 9

para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400para 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398para 5(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401para 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405

Sch 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401para 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

para 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402

para 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402para 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402para 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401para 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402para 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

Sch 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396Sch 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378

para 3(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 382

para 12(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

Sch 17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409Part 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409Part 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409

Friendly Societies Act 1992 (partly repealed by FSMA 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 309

Human Rights Act 1998 (HRA 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381

s 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381

Insurance Companies Act 1982 (repealed by FSMA 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . 309, 486

Larceny Act 1861 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314

s 84 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page xli

Misrepresentation Act 1967. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391, 426, 476

s 2(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426–8(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427–8

s 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427

Powers of Criminal Courts Act 1973s 35 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323

Prevention of Fraud (Investments) Act 1939 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486

s 12(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313–14

Prevention of Fraud (Investments) Act 1958 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486

s 13. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314, 316

Theft Act 1968 (as amended) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315, 330

s 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328s 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328s 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 328

Unfair Contract Terms Act (UCTA) 1977 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427

s 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427s 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427Sch 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427

Youth Justice and Criminal Evidence Act 1999s 59 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381Sch 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381

STATUTORY INSTRUMENTSFinancial Services and Markets Act 2000 (Financial Promotion) Order 2001 (FPO), SI 2001/1335 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324, 406

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 7

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324, 407(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 324, 407

Art 8(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325, 407(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325, 407

Art 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408

Art 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 41 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 48 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 49 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 50 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Art 51 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408

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Table of European Treaties, Instruments, and National Legislation xliii

Arts 62–6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Arts 68–70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Arts 71–3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408Sch 1

Part I. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Part II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 12. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 14. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Art 15. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406Arts 16–24. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406

Financial Services and Markets Act 2000 (Market Abuse) Regulations 2005, SI 2005/381. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307, 311, 316, 319, 332, 339, 360–1, 397

reg 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339Sch 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361, 397

Financial Services and Markets Act 2000 (Misleading Statements and Practices) Order 2001, SI 2001/3645 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315

Financial Services and Markets Act 2000 (Official Listing of Securities) Regulations 2001, SI 2001/2956

reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398reg 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398reg 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

reg 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401

reg 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405Financial Services and Markets Act 2000 (Prescribed Markets and Qualifying Investments) Order 2001, SI 2001/996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339

Art 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges and Clearing Houses) Regulations 2001, SI 2001/995

Sch, Part I, para 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 378Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166, 340

Financial Services and Markets Act 2000 (Rights of Action) Regulations 2001, SI 2001/2256 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392reg 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 394

Financial Services and Markets Tribunal (Legal Assistance) Regulations 2001, SI 2001/3632 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

Financial Services and Markets Tribunal (Legal Assistance—Costs) Regulations 2001, SI 2001/3633 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

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Financial Services and Markets Tribunal Rules 2001, SI 2001/2476 . . . . . . . . . . . . . . . . . . . . . . . . 382

r 22(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

r 23 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

r 24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383r 25

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383

Insider Dealing (Securities and Regulated Markets) Order 1994, SI 1994/187, amended by Insider Dealing (Securities and Regulated Markets) (Amendment) Order 1996, SI 1996/1561 andDealing (Securities and Regulated Markets) (Amendment) Order 2000, SI 2000/1923 . . . . . . . . 322

Investment Recommendation (Media) Regulations 2005, SI 2005/382 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307, 311, 332, 360, 365–6, 409

reg 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365reg 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365

reg 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366reg 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366reg 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366

(2)(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366

reg 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366reg 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366reg 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366reg 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366reg 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409, 425, 487

Money Laundering Regulations, SI 2003/3075 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384

Public Offers of Securities Regulations 1995 (POS Regulations 1995), SI 1995/1537 . . . . . . . . . 427

reg 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396reg 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401reg 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 403Sch 9, para 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400

Public Offers of Securities (Amendment) Regulations 1999, SI 1999/734. . . . . . . . . . . . . . . 397, 400

FSA HandbookAuthorization Manual (AUTH)

AUTH 1.1.2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

Conduct of Business Rules (COB)

COB 1.2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 1.3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 1.4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 2.1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390COB 2.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156, 316, 395COB 2.4.4R(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359COB 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405COB 3.8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406

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COB 3.8.4(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 406

COB 7.1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 7.2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 7.3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 7.4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 7.5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 7.6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 7.7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395COB 7.16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 390, 425, 487COB 7.17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311, 360, 365–6, 390, 409, 425, 487COB 7.17.5R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366COB 7.17.6R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366COB 7.17.8R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366–7COB 7.17.8R(1)(f ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366COB 7.17.10R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366COB 7.17.11R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366COB 7.17.11R(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366COB 7.17.17R(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366COB 7.17.18R(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 366

Code of Market Conduct (COMAC)MAR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392MAR 1.1.2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341MAR 1.1.4G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341MAR 1.1.5G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341

MAR 1.1.6G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341MAR 1.1.7G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341MAR 1.2.3G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337MAR 1.2.5E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335, 338MAR 1.2.12E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337, 343–4MAR 1.2.13E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343–4MAR 1.2.16E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343MAR 1.2.21G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358MAR 1.2.23G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358MAR 1.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 394MAR 1.3.2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342, 344

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347

MAR 1.3.3E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344–5(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348

MAR 1.3.4E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342MAR 1.3.5E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344–5MAR 1.3.6C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 345, 349MAR 1.3.7C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261, 341, 346, 349MAR 1.3.8G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261, 346, 349

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MAR 1.3.9E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261MAR 1.3.10E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261, 346MAR 1.3.11E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261MAR 1.3.12C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261, 346, 349MAR 1.3.13G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261MAR 1.3.14E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261MAR 1.3.15E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261, 346,MAR 1.3.17C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346–7, 349, 358MAR 1.3.18G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347MAR 1.3.19E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 347MAR 1.3.20G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342MAR 1.3.21G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342MAR 1.3.22G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342MAR 1.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 394MAR 1.4.2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342MAR 1.4.3C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348MAR 1.4.4C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348MAR 1.4.5E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348, 357MAR 1.4.6G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342MAR 1.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 394MAR 1.5.2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343MAR 1.5.3G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343MAR 1.5.4E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343MAR 1.5.5E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343MAR 1.5.6E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343MAR 1.5.7E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345

MAR 1.5.8G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349MAR 1.5.9C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349MAR 1.5.10E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345MAR 1.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341MAR 1.6.2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128, 349

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337

MAR 1.6.3G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353MAR 1.6.4E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350, 354

(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349, 354(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337

MAR 1.6.5E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337, 351MAR 1.6.6E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351MAR 1.6.7G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351–2MAR 1.6.8G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351–2MAR 1.6.9E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144, 351

(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137MAR 1.6.10E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351MAR 1.6.11E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354MAR 1.6.12G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355MAR 1.6.13G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355MAR 1.6.14E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354

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Table of European Treaties, Instruments, and National Legislation xlvii

MAR 1.6.15E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128, 337, 350(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349

MAR 1.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 390MAR 1.7.2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 355MAR 1.7.3E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 355MAR 1.8. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341, 390, 487MAR 1.8.3E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356MAR 1.8.4E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356MAR 1.8.5E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356MAR 1.8.6E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356MAR 1.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341MAR 1.9.1E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357MAR 1.9.2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357MAR 1.9.3C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 358MAR .1.9.4E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357MAR 1.9.5E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357

(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357MAR 1.9.2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 357MAR 1.9.4E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317MAR 1.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359MAR 1.10.2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359MAR 1.10.4C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359MAR 1.10.5C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359MAR 1.10.6C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359MAR 1 Annex 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359MAR 1 Annex 2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335, 354MAR 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140, 312, 316, 323, 359, 393MAR 2.2.1R(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359MAR 2.2.8G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393MAR 2.2.9R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393MAR 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395MAR Sch 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393, 394–5

Disclosure Rules (DR)

DR 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361, 364DR 1.1.1R

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364

DR 1.3.4R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361DR 1.4.1R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 1.4.3R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363DR 1.4.4G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361, 364DR 2.2.1R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361, 362DR 2.2.3G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361DR 2.2.4G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361DR 2.2.5G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361–2DR 2.2.6G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361DR 2.2.7G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361DR 2.2.8G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361

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DR 2.5.1R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361DR 2.5.3R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361DR 2.5.4G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 2.5.5G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 361–2DR 2.5.6R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363DR 2.5.7G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 2.5.8G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363DR 2.6.1R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 2.6.2R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 2.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 2.7.1G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 2.7.2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362DR 2.7.3G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363DR 2.8.1R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363DR 2.8.2R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 2.8.3R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 2.8.4R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 2.8.5R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 3.1.2R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 3.1.3R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364DR 3.1.4R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364

Dispute Resolution: Complaints (DIS)

DISP 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409DISP 2.2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410DISP 2.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410DISP 2.4.2R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410DISP 2.4.3R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410DISP 2.6.1R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410DISP 2.6.2R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410DISP 2.6.9R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410DISP 3.2.14G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411DISP 3.9.2R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411DISP 3.9.3G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411DISP 3.9.5R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411DISP 3.9.6G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

Enforcement Manual (ENF)

ENF 2.3.2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368ENF 2.6.2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370

(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370ENF 2.13.2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371ENF 2.13.3G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371ENF 2.13.4G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371ENF 2.13.5G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371ENF 6.6.2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372

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Table of European Treaties, Instruments, and National Legislation xlix

(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372

ENF 9.6.2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.3G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.4G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.5G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.6G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.7G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.8G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.9G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.10G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.11G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.12G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.13G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 9.6.14G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 374ENF 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377ENF 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376ENF 14.2.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376ENF 14.3.2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377ENF 14.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376ENF 14.4.2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376

(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376

ENF 14.6.2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377ENF 14.7.4G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377

(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377

ENF 14.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370ENF 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384ENF 15.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384ENF 15.5.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384ENF 15.7.2G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384

(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385

ENF 15.7.4G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385ENF 15.7.5G . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385ENF 15, Annex 1G

para 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 384

Principles for Businesses (PRIN)

PRIN 1.1.2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392PRIN 2.1.1R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166, 487PRIN 4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

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PRIN 11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369PRIN Sch 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392

Statements of Principle for Approved Persons (APER)

APER 2.1.2P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166, 369APER 4.1.3E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487APER 4.1.12E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 487

Substantial Acquisition Rules (SARs). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344–5, 359

Supervision Manual. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360

SUP 15.10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360SUP 15.10.2R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367SUP 15.10.3R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367SUP 15.10.4G(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367SUP 15.10.6R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367SUP 15.10.9R(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 368SUP 15 Annex 5G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 367

Takeover Panel Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344–5, 359

LSE Rules

r 33002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3793 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3794 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379

r 3301 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379

UKLA Listing Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379

r 5.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396, 398r 5.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399, 427r 5.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 5.7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 5.8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 5.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399r 5.17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399r 5.23A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399Model Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379

UKLA Rules for Approval of Prospectuses where no Application for Listing is Made

r 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396r 16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396

United States

Commodity Exchange Act (CEA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104, 106

s 6(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104

s 9(a)

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104Commodity Futures Trading Commission Act of 1974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

Glass-Steagall Act of 1933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

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Gramm-Leach-Bliley Financial Modernization Act of 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210

Insider Trading and Securities Fraud Enforcement Act 1988 (ITSFEA 1988). . . . . . . . . . . . . . . 486

s 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486Private Securities Litigation Reform Act 1995 (PSLRA). . . . . . . . . . . . . . . . . . . 313, 446, 451, 464, 472,

474–5, 483, 485

Public Company Accounting Reform and Investor Protection Act of 2002 (Sarbanes-Oxley Act). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6, 10, 96, 175, 210, 403, 454

ss 101–8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96s 203 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96s 206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96s 302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96s 307 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96s 308(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 470s 409 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255s 807 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454

Securities Act of 1933 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10, 105, 169, 175, 210, 314, 395

s 27A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475Securities Exchange Act of 1934 . . . . . . 10, 76, 104–5, 130, 133, 175, 199, 210, 230, 313–14, 395

s 9(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 472s 10 (b) . . . . . . . . . . . . . . 76, 104–5, 107, 115, 127, 138, 196–9, 252, 313, 458, 472–3, 479, 490s 14 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114s 15

(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104–5

s 16(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100, 105, 207, 472

s 17(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126

s 20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486s 20A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 486s 21A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458s 21D(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483s 21E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475

Securities Litigation Uniform Standards Act 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 476

Regulatory Rules

SEC Rule 10(b)–5 . . . . . . . . . . . . . . . . . . . . . . 104, 252, 313, 446, 458, 472–3, 479–80, 483, 490SEC Rule 10(b)–7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140SEC Rule 10(b)–21T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143SEC Rule 14(e)–3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196, 198SEC Rule 3(b)–16. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28SEC Rule 14(e)–3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196SEC Rule 16(b)–3(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100SEC Regulation of Exchanges and Alternative Trading Systems SEC Regulation (ATS) . . . . . . . 28SEC Regulation Fair Disclosure (FD). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266

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List of Abbreviations

GENERAL TERMS

ATS alternative trading system

CAPM Capital Asset Pricing ModelCBOE Chicago Board Options ExchangeCEA Commodity Exchange Act (US)CEO chief executive officerCESR Committee of European Securities RegulatorsCFTC Commodity Futures Trading Commission (US)CJA 1987, 1993 Criminal Justice Acts 1987, 1993COB Conduct of Business rulebook (UK FSA)COMAC Code of Market Conduct (UK FSA)CPS Crown Prosecution ServiceCREST electronic settlement system operated by the Bank of England

DR Disclosure Rules (UK FSA)DTI Department of Trade and Industry

ECHR European Convention on Human RightsECJ European Court of JusticeECMH Efficient Capital Market HypothesisEEA European Economic AreaENF Enforcement Manual (UK FSA)ESC EC Securities Committee

FOS Financial Services Ombudsman SchemeFPO Financial Promotions Order 2002, SI 2001/1335FSA Financial Services Authority (UK)FSAP Financial Services Action Plan (EU)FSCS Financial Services Compensation SchemeFSMA 2000 Financial Services and Markets Act 2000FTSE 100 Financial Times Stock Exchange 100 Index

GFA 1922 Grain Futures Act 1922 (US)

IAS Regulation on International Accounting Standards (Reg (EC)1606/2002)

IDBN Inter-Dealer Broker NetworkIDBs Inter Dealer Brokers (UK)IIMG Inter-Institutional Monitoring GroupIOSCO International Organization of Securities CommissionsIPO initial public offeringISD Investment Services Directive (93/22/EEC)ITC information technology communications

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List of Abbreviations liii

LME London Metal ExchangeLSE London Stock Exchange

MAR Market conduct sourcebook (UK FSA)MiFID Markets in Financial Instruments DirectiveMTF multilateral trading facility

NASD National Association of Securities Dealers (US)NASDAQ National Association of Securities Dealers Automated Quotation

SystemNYSE New York Stock Exchange

OECD Organization for Economic Cooperation and DevelopmentOTC over-the-counter

PI portfolio insurancePSLRA Private Securities Litigation Reform Act 1995 (US)

RIE Recognised Investment Exchange Schemes

S&P 500 Standard and Poor’s main stock indexSA 1933 Securities Act 1933 (US)SARs Substantial Acquisition RulesSEA 1934 Securities and Exchange Act 1977 (US)SEA 1986 Single European Act 1986SEAQ Stock Exchange Automatic Quotation System (UK)SEC Securities and Exchange Commission (US)SETS Securities Electronic Trading ServiceSFO Serious Fraud Office (UK)SIB Securities and Investments Board (UK)SUP Supervision Manual (UK FSA)

TAURUS Transfer and Automated Registration of Uncertified Stock

UCITS Unitised Collective Investment Trust SchemesUCTA 1977 Unfair Contract Terms Act 1977UKLA UK Listing Authority

VAR value-at-risk

JOURNALS

Acct Rev Accounting ReviewALER American Law and Economic ReviewAm Crim LR American Criminal Law ReviewAm Econ Rev American Economic Review

BU LR Boston University Law Review

00-Avgouleas-Prelims.qxd 29/7/05 06:09 AM Page liii

Cal LR California Law ReviewCFILR Company Financial and Insolvency Law ReviewCLJ Cambridge Law Journal (UK)CMLRev Common Market Law ReviewCol Bus LR Columbia Business Law ReviewCol LR Columbia Law ReviewCorn LR Cornell Law Review

EFSL European Financial Services LawELJ European Law JournalELR European Law Review

FMII Financial Markets, Institutions and Instruments

GWLR George Washington Law Review

Harv JLPP Harvard Journal of Law and Public PolicyHarv LR Harvard Law Review

ICLJ International Comparative Law JournalIowa JCL Iowa Journal of Corporate Law

J Acct & Econ Journal of Accountancy and EconomicsJ Bus Journal of BusinessJ Econ Lit Journal of Economic LiteratureJ Econ Persp Journal of Economic PerspectivesJ Fin Econ Journal of Financial EconomicsJ Fin Res Journal of Financial ResearchJ Fin Journal of FinanceJ Inv Mgmt Journal of Investment ManagementJACF Journal of Applied Corporate FinanceJFQA Journal of Financial and Quantitative AnalysisJFRC Journal of Financial Regulation and ComplianceJIBL Journal of International Banking LawJLE Journal of Law and EconomicsJLEO Journal of Law, Economics and OrganizationJLPP Journal of Law and Public PoliciesJLS Journal of Legal StudiesJPSP Journal of Personality and Social Psychology

LMCLQ Lloyd’s Maritime and Commercial Law QuarterlyLSI Law and Social Inquiry

MLR Modern Law Review

NLJ New Law JournalNwU LR Northwestern University Law ReviewNYU LR New York University Law Review

List of Abbreviationsliv

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List of Abbreviations lv

OJLS Oxford Journal of Legal StudiesQJ Econ Quarterly Journal of Economics

S Cal LR Southern California Law ReviewStan LR Stanford Law Review

Tulane LR Tulane Law Review

UCLA LR University of California, Los Angeles Law ReviewUniv Chi LR University of Chicago Law ReviewUniv Cin LR University of Cincinnati Law ReviewUniv Conn LR University of Connecticut Law ReviewUniv Ill LR University of Illinois Law ReviewUniv Pa LR University of Pennsylvania Law Review

Va LR Virginia Law ReviewVand LR Vanderbilt Law Review

W&L LR Washington and Lee Law ReviewWash ULQ Washington University Law Quarterly

YLJ Yale Law Journal

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1

Introduction

1.1 The Importance of Open Markets Free of Abuse

1.1.1 The Mechanics of Market Abuse

The history of financial markets is full of epic gains and colossal catastrophes owed to‘manias’, ‘panics’, and ‘crashes’, accounts of which often enter the realm of legend, butthe financial hardship they leave behind remains devastating. Market abuse is one ofthe main causes of such market anomalies and of large-scale frauds.¹ The perpetrationof schemes intending to abuse the market and ‘ease’ investors from their savings,exploiting also their eagerness to ‘herd’ in order to become rich as fast as possible, is asold as financial markets themselves.² The widespread manipulation and insiderdealing associated with the South Sea Bubble,³ which took place as early as 1720,provides an indication of how long is the history of market abuse.⁴The South Sea Bubblehas been followed by numerous similar incidents over the centuries.⁵ The most recentare, of course, the US corporate frauds of Enron, Tyco, Adelphia, Qwest, andWorldcom, among others, which, apart from widespread market manipulation, alsoinvolved extensive dealing by insiders⁶ and the production of tainted analysts’ reportsfor technology companies’ stock, feeding further the stock ‘bubble’ of the late 1990s.

¹ Two works dealing with ‘bubbles’, ‘manias’, and ‘crashes’ are today regarded as all-time classics in theliterature of economics. The first is the late Professor Kindleberger’s Manias, Panics and Crashes (New York:Wiley & Sons, 4th edn, 2000), 1st edn 1978 and the second is J.K. Galbraith’s Great Crash, 1929 (Boston:Houghton Mifflin, 1955). See also Galbraith, A Short History of Financial Euphoria (New York: WhittleBooks in association with Viking, 1993).

² For a concise account of manipulation schemes and their perpetrators in the 1690s see E. Chancellor,Devil Take the Hindmost, A History of Financial Speculation (New York: Penguin, 1999) 44–49 and 34–39(hereinafter Chancellor, Devil Take the Hindmost). Also for the early association of stock market tradingwith gambling see Chancellor, ibid, 39–44.

³ For an excellent account of the ‘South Sea Bubble’ see Chancellor, ibid, ch 3. See also J. Carswell, TheSouth Sea Bubble (London: Crescent Press, 1960).

⁴ In fact, there are allegations that a form of market manipulation, an ‘artificial squeeze’, took place inthe first recorded major bubble, the ‘Tulip Mania’. See Chancellor, Devil Take the Hindmost (n 2 above) 20–27. See also P. Garber, Famous First Bubbles: The Fundamentals of Early Manias (Cambridge, Mass: MITPress, 2000).

⁵ For an account of the history of stock-price manipulation see Twentieth Century Fund, SecurityMarkets (New York: H. Woolf, 1935).

⁶ The SEC’s civil complaint against Kenneth Lay, Enron’s former CEO, states: ‘The Securities andExchange Commission today initiated civil charges against Kenneth L. Lay, former Chairman and Chief

01-Avgouleas-Chap-01.qxd 28/7/05 09:38 PM Page 3

It is widely admitted that no behaviour is a more potent enemy of market efficiencyand bigger destroyer of investor confidence than market abuse. Market abuse predom-inantly takes the form of abuse of inside information (insider dealing) and of marketmanipulation. A generic definition of insider dealing would describe it as a form ofeconomic behaviour in the context of which insiders (corporate officers, directors, andothers) take advantage of their access to non-public information and either trade onthe basis of such information themselves or disclose it to third parties encouragingtheir trading. The purpose of this trading is to exploit discrepancies between the current market price of financial instruments, which is based on publicly knowninformation, and the possible future price that will be reached once inside informationis made public.

Market manipulation is also a form of economic behaviour. It is usually perpetratedby means of dissemination of misleading information, including the publication offalse financial accounts or concealment and retention of material market information.These practices create false impressions as regards the worth of financial instrumentsor of their issuers and lead to distorted valuations (‘artificial prices’). The perpetratorsof such practices are not only company insiders, who seriously prejudice the interestsof other groups of stakeholders, such as small shareholders, employees and creditors,but also investment bank employees such as ‘star’ investment analysts and other pro-fessional advisers. Other forms of abusive practices that are perceived as marketmanipulation comprise the carrying out of artificial transactions and the conduct ofmisleading trades, namely orders and transactions structured in such a way as to createa false or misleading impression about the state of supply and demand and the value ofrelevant instruments. Therefore, in economic terms, market manipulation constitutesthe transfer of wealth, through the use of unfair and (usually) outright illegal means,from the vast number of outside investors to a very small number of (unscrupulous?)insiders and speculators who have adopted structured steps targeting the distortion of market prices or the creation of false or misleading impressions about the value,supply, or demand of any financial instrument or of a physical commodity.

1.1.2 Efficient Allocation of Resources and Legitimacy

Economic theory suggests that financial markets play a prominent role in the efficientallocation of capital resources and constitute the steam-engine of economic growth inthe modern world. They are also, more than ever before, a very significant mechanismin the distribution of wealth between different social classes and countries. In thiscapacity, financial markets have acquired, for some commentators, the (often

I. Economic Analysis4

Executive Officer of Enron Corp., for his role in a wide-ranging scheme to defraud by falsifying Enron’spublicly reported financial results and making false and misleading public representations about Enron’sbusiness performance and financial condition. The Commission also alleges Lay profited from the scheme todefraud by selling large amounts of Enron stock at prices that did not reflect its true value. The sales also occurredwhile Lay was in possession of material non-public information concerning Enron and generated unlawful pro-ceeds in excess of $90 million during 2001 . . . Lay’s proceeds from the sales constitute illegal gains resulting fromhis scheme to defraud.’ See SEC Press Release No 2004–94, ‘SEC Charges Kenneth L. Lay, Enron’s FormerChairman and Chief Executive Officer, with Fraud and Insider Trading’, 8 July 2004, available atwww.sec.gov/news/press/2004–94.htm (emphasis added).


1. Introduction 5

undesired by its actors) status of a social institution. The orderly operation of anysocial institution entails not only that it functions legally and all those involved with ituphold the law and engage in lawful practices, but also that it is vested with a certaindegree of legitimacy. The occurrence of market abuse make financial markets look likea ‘crooked crap game’, diminishing their legitimacy and harming, in the process, theway investment is channelled to productive uses on an international scale.

In fact, international financial markets experienced a very serious crisis of confidenceduring the years that followed the 1996–2000 stock market ‘bubble’.⁷ This was duenot only to the ‘bursting’ of the ‘stock bubble’, but also because of the aforementionedgrand-scale frauds. These caused massive losses to investors and led to a serious misallocation of capital resources to inefficient and ultimately wasteful uses.

1.2 A Modern Study of Market Abuse

1.2.1 Is There a Need for a Modern Study of Market Abuse?

This book comes in the aftermath of an era which saw the bursting of the biggest stockmarket bubble of the post-war period and some of the worst corporate abuses thebusiness world has seen since 1929. These events sent ripples of terror to investorsthroughout the world and initiated discussions which, using considerable hyperbole,were even questioning whether the end of capitalism was nigh. The same era witnessedthe demise of the ‘star’ securities analyst, victim of his/her employers’ conflicts ofinterest and his/her own greed and vanity. For a time the market seemed to be rife withmarket abuse extending from insider dealing to the calculated timing of mutual fundstrades aiming to favour selected clients and fund managers.⁸

Judicial, regulatory, and academic analysis of the stock market bubble of the late1990s and of the grand-scale frauds that were associated with it have brought newinsights to the analysis of market abuse. In addition, the 1990s have witnessed theincreased integration of global financial markets and the advent of the informationcommunications revolution, with the use of the Internet both for information gatheringand trading purposes.⁹ These developments have meant increased opportunity for the

⁷ The ensuing ‘bear market’ was quite severe. See ‘Whipsawed by Wall Street’ Business Week, 10 March2003, 45–47. US and European securities markets started posting positive returns only in the second half of2003, almost 3 years after the bursting of the bubble and 2 years after the revelation of the Enron,WorldCom, and Tyco frauds. Market recovery that has continued since at a steady but cautious pace hasbeen mostly due to the good financial results posted by US and Asian companies. Two factors have con-tributed to this recovery and neither of them may be counted on perennially. Productivity gains, due, tosome degree, to overinvestment in IT infrastructure during the bubble years and the wide availability of verycheap credit. As the stimulus to business expansion provided by both factors will at some point diminish,business undertakings will need to return to the capital markets to continue financing their investments andinvestor confidence will prove again a factor of cardinal importance in ensuring steady economic growth.

⁸ D. Wells, ‘Spitzer Throws the Book at Late Trading’ Financial Times, 5 April 2004, 1.⁹ An excellent discussion of the challenges to law posed by the use of the Internet for the conclusion of

financial contracts can be found in W. Blair and D. Guest, ‘Jurisdiction, Conflicts of Law and the Internet’,in G. Ferrarini, K.J. Hopt and E. Wymeersch (eds) Capital Markets in the Age of the Euro—Cross-BorderTransactions, Listed Companies and Regulation (The Hague: Kluwer Law International, 2002) 165.


perpetration of cross-border market abuse,¹⁰ and the elimination of geographical barriers has further weakened the ability of national regulators to police internationalfinancial markets effectively.¹¹

Partly as a response to the aforementioned market challenges, regulatory activism hasbeen on the rise in the last five years and a number of very important statutes, directives,and attendant regulatory rules dealing with market abuse have been introduced in themost important legal orders of the Western world (the US, the UK, and other EUMember States). Representative examples of this trend are the US Sarbanes-Oxley Act,¹²the UK’s Financial Services and Markets Act 2000 (FSMA 2000) and the EC MarketAbuse Directive.¹³ These legislative instruments have changed radically the substanceand structure of the respective market abuse regimes. However, an extensive study of theUS market abuse regime in the post Sarbanes-Oxley era would seem pleonastic, since agreat number of good academic works have been dedicated to this topic. On the otherhand, an interdisciplinary analysis of the insider dealing and market manipulationregimes that have emerged in the UK and the rest of the EU is truly urgent, drawing alsocomparisons with the corresponding US legal and regulatory framework.

The discussed market and legislative developments have thrown the issue of thedeterrence and punishment of market abuse into sharp focus for global policy-makers,regulators, investors, scholars, and the media. Therefore, a (post-)modern interdis-ciplinary and conceptual study of the practices/offences of market manipulation andinsider dealing is required to inform with its findings the on-going debate on thecauses of market abuse and effective remedies for its deterrence and punishment. Thepurpose of this book is to provide such an analysis. In addition, any (post-)modernstudy of market abuse is compelled to examine the insights that the emerging beha-vioural (cognitive) analysis theory has brought to the study of financial markets andthe analysis of economic regulation. The utilization of the methodological tools of


¹⁰ Technical Committee of the International Organization of Securities Commissions (IOSCO),‘Investigating and Prosecuting Market Manipulation’, May 2000, 3–4.

¹¹ See E. Ferran and C. Goodhart, ‘Regulating Financial Services in the Twenty First Century: AnOverview’ in Ferran and Goodhart (eds) Regulating Financial Services in the Twenty First Century (Oxford:Hart Publishing, 2001) 2–4; M.I. Steinberg, International Securities Law: A Contemporary and ComparativeAnalysis (Kluwer Law International, 1999) xvii. For an analytical exposition of these changes, and of theregulatory challenges they pose, see E. Avgouleas, ‘Financial Market Regulation and the New MarketLandscape: In Search of a New Regulatory Framework for Market Abuse’ (2000) 2 ICLJ 89, 110–113.

¹² ‘Public Company Accounting Reform and Investor Protection Act of 2002’, 15 USC § 7201 et seq,107 Pub L No 204, 116 Stat 745 (2002); commonly referred to as the Sarbanes-Oxley Act after the namesof its respective sponsors in the Senate and the House of Representatives. The Act is a wide-ranging cor-porate governance and accounting reform law, designed to improve the quality of financial reporting,independent audits, and accounting services for public companies, to strengthen the independence ofaccounting firms that audit public companies and to increase the responsibility of management for a publiccompany’s financial and corporate disclosures. To enforce these objectives, the Act substantially increasescivil and criminal penalties for securities law violations. On 30 July 2002, President Bush, upon signing theSarbanes-Oxley Act, described it as mandating ‘the most far-reaching reforms of American business practicesince the time of Franklin Delano Roosevelt’.

¹³ Directive 2003/6/EC of 28 January 2003 on insider dealing and market manipulation (marketabuse), [2003] OJ L96/16 (hereinafter the Market Abuse Directive). Note that the term European Union(EU) is used in this book to indicate the geographical, economic and political dimensions of the EU. Theterm European Community (EC) is used in strictly legal terms to describe the source of relevant legislation,which is the EC pillar of the EU.


1. Introduction 7

behavioural analysis and the endorsement of its normative assumptions in the study ofeconomic regulation has led to the formation of two intellectual movements calledrespectively ‘post-modern’ or ‘behavioural’ finance theory and ‘behavioural law andeconomics’.

This book’s primary focus is on the analysis of the mechanics of insider dealing andmarket manipulation and on rationales underlying their regulation. The book usestraditional legal analysis in the discussion of legal and regulatory rules dealing withmarket abuse. At the same time it employs some of the assumptions of economicanalysis to evaluate the effectiveness of market abuse regulations in the UK and therest of the EU. The advent of the new EC regulation for financial markets enables theresearcher to deal with the EU regime for market abuse in a unitary fashion withoutengaging in a detailed study of applicable rules in each Member State. The particular-ities of the UK’s market abuse regime and the fact that Britain hosts the oldest andmost advanced investment markets in Europe provide adequate justification for a sep-arate study of the UK’s regime, highlighting also the ever increasing influence, if notdomination, of EC law in this area.

The present study does not offer empirical research on the economic efficiency ofthe UK and EC market abuse regimes. Of course, a number of well-known studies ofUK company law have to some extent relied on the findings of empirical research.¹⁴Yet, this is an area of law that has been evolving for at least a hundred and fifty years. Asa result, there is a wealth of academic and industry studies that may be relied upon inthe context of a consistent economic analysis of the relevant rules. On the other hand,both the UK and EU regimes dealing with market abuse are relatively new. The ECInsider Dealing Directive¹⁵ was enacted in 1989 and implemented in the UK only in1993 with Part V of the Criminal Justice Act 1993. The FSMA 2000 market abuseregime did not come into effect until December 2001, and the EC Market AbuseDirective was implemented into the legal orders of the EU Member States only closeto the end of 2004. A dearth of empirical research and experience with regulatoryimplementation means that, at this early stage, the economic analysis of the relevantregulations may only incorporate theoretical perspectives.

Sections 1.2.2 and 1.2.3 below, offer brief summaries of the most important marketevents and regulatory developments that have influenced the shape and direction ofmarket abuse regulation since the 1999 ‘stock market bubble’.

1.2.2 The End of an Era

The bursting of the ‘dotcom bubble’ had a severe effect on a number of very largetelecommunication companies, such as Vivendi,¹⁶ Deutsche Telecom, and France

¹⁴ eg B.R. Cheffins, Company Law Theory, Structure and Operation (Oxford: Oxford University Press,1997) (hereinafter Cheffins, Company Law).

¹⁵ Council Directive 89/592/EEC of 13 November 1989 coordinating regulations on insider dealing,[1989] OJ L334/30.

¹⁶ It is indicatively noted that for the year 2001–02 Vivendi had to write down 12.6 billion euros ‘in thevalue of assets bought during its acquisition binge’. See ‘Vivendi Universal, Messier’s Mess’ The Economist, 8 June 2002, 55–56.


Telecom which, on the basis of a very high and (ultimately) unrealistic market capitalization, accumulated large amounts of debt to finance geographical expansionand investment in new products and services. However, no signs that these companiesdefrauded investors have ever arisen. On the other hand, corporate fraud on thegrandest scale—effected through profit misstatements or complex, but ultimatelyfraudulent, accounting schemes intending to overstate profits by a few billiondollars—has been unveiled in some of the biggest US and global corporations. Executivesand other persons associated with these companies perpetrated large-scale manipula-tions at the expense of outside investors and also seem to have engaged in widespreadinsider dealing. This ‘club’ of crooked companies ‘recognizes’ among its members thenotorious Enron,¹⁷ the telecommunications giants of WorldCom, Qwest, and Tyco,¹⁸and such ‘old fashioned’ behemoths as Xerox and more recently Parmalat,¹⁹ a companywhose principal activity involved the production of dairy products! Moreover, ArthurAndersen, the most successful professional services firm in the world (accounting andconsulting) in the 1990s, is now defunct, following its role in the Enron fraud and itsindictment before a Texas Grand Jury for obstruction of justice,²⁰ as its partners inChicago and Houston seemed to have a particular and not at all innocuous ‘fondness’for the shredding machine. Even McKinsey’s role in Enron’s business plan—which was,ultimately, so flawed that it led to the revealed fraud and abuse of shareholders’ funds—was subject to questioning by the press.²¹


¹⁷ For the facts surrounding the collapse of Enron see W.C. Powers, et al, ‘Report of Investigation by theSpecial Investigative Committee of the Board of Directors of Enron Corp,’ 1 February 2002, 2002 WL198018; Newby v Enron Corp 2002 WL 31854963 (SD Tex Dec 20, 2002) (ruling on motions to dismissinvestor class action for securities fraud brought against Arthur Andersen, banks and law firms associatedwith Enron’s fraudulent actions). For a comprehensive description of Enron’s business and a concise sum-mary of the events that led to its collapse see W.W. Bratton, ‘Enron and the Darkside of Shareholder Value’(2002) 76 Tulane Law Review 1275; J.N. Gordon, ‘What Enron Means for the Management and Controlof the Modern Business Corporation: Some Initial Reflections’ (2002) 69 Univ Chi LR 1233.

¹⁸ For detailed journalistic reporting and analysis of US corporate scandals see Financial Times SpecialReports: ‘Enron: The Collapse’, ‘WorldCom’, ‘Tyco’, ‘Capitalism in Crisis’, ‘Corporate America in Crisis’,‘Barons of Bankruptcy’ available at www.ft.com.

¹⁹ The Parmalat scandal broke in December 2003 when the dairy and juice conglomerate acknowledgedthat it did not have the €3.95 billion it claimed it had deposited in a Bank of America account. The fraudunravelled soon afterwards. It seems that the Tanzi family, Parmalat’s controlling shareholders, and its aud-itors had repeatedly misled investors and creditors, since the company’s financial statements misrepresentedthe condition of the company’s assets and their size. Soon after the discovery of the fraud, Parmalat wentinto bankruptcy protection, and senior company figures, including its founder C. Tanzi, were placed underarrest. In March 2004 Italian prosecutors requested the indictment of 29 persons and 3 institutions linkedto the scandal: Bank of America Corp (BAC), Deloitte & Touche SpA, and the former Italian branch ofauditors Grant Thornton. See ‘Prosecutors Request 32 Indictments over Parmalat-Reports’ Wall StreetJournal, 26 March 2004, available at www.wsj.com.

²⁰ US v Arthur Andersen, LLP, US District Court, Southern District of Texas, 18 USC, §§ 1512(b)(2)and 3551 et seq. See for commentary, A.B. Krueger (a professor of economics and public affairs at PrincetonUniversity), ‘Accounting for Bad Apples: Investors in the Stock Market Render their Verdicts’, New YorkTimes, 25 July 2002.

²¹ J. Doward, ‘The Firm that Built the House of Enron’ The Observer, 24 March 2002, available atwww.guardian.co.uk/enron/story/0,11337,672919,00.html; J.A. Byrne et al, ‘Inside McKinsey, Enron isn’tits only Client to Melt down. Suddenly, Times are Trying for the World’s Most Prestigious Consultant’,Cover Story Business Week, 8 July 2002, available at www.businessweek.com/magazine/content/02_27/b3790001.htm.


1. Introduction 9

The ‘unscrupulous’ conduct of a few of the largest Wall Street banks during the‘bubble years’ has been another major issue, hampering, as a gigantic thorn, efforts torestore investor confidence in the integrity of capital markets.²² Tainted research²³ andfavouritism in the allocation of new ‘hot’ technology stock issues brought a painfulinvestigation into their affairs conducted by the New York State Attorney General,Eliot Spitzer.²⁴ Regulatory investigations into investment bank analysts’ reports culminated in the signing of the so-called ‘Wall Street Settlement’.²⁵

The aforementioned abuses led to a global dissipation of investors’ wealth in numbers that surpass imagination: the most recent figure puts cumulative investorlosses in the vicinity of US$1 trillion. Losses from the failures of WorldCom, Tyco,Qwest, Enron, and Computer Associates alone are estimated to be around US$460billion.²⁶ As a result, insurance companies and pension funds found themselves in astate of worry, since a large number of their assets were bound to the stock markets. Inaddition, Enron and the other financial frauds of WorldCom,²⁷ Adelphia, and Tyconot only tarnished the reputation of international financial markets, but also speltfinancial ruin for Enron employees, who lost their pension contributions, and for thedefrauded shareholders of the companies involved in those scandals.²⁸ They also led toa (temporary) shortage of private investment both for the developing and developedworld, leading the global economy to the threshold of economic stagnation, if notrecession.

1.2.3 Regulatory Reform

The occurrence of such a large number of incidents of corporate fraud and marketabuse have, in turn, given rise to increased regulatory activism on both sides of theAtlantic, but mostly in the US.²⁹ A number of Congressional and numerous judicial

²² ‘Special Report: Wall Street, the Value of Trust’ The Economist, 8 June 2002, 63–66.²³ See eg G. Farbikant and S. Romero, ‘When Wall Street Advice Turns Costly’, New York Times, 11

March 2002, C1; S. Thurm, ‘When do Analysts Cover their own Interests?’ Wall Street Journal, 10December 2001, C1. See also J.I. Gross, ‘Securities Analysts’ Undisclosed Conflicts of Interest: UnfairDealing or Securities Fraud?’ (2002) Col Bus LR 631–636.

²⁴ eg Citigroup was investigated in connection with allegations that Salomon Smith Barney, its invest-ment banking arm, treated WorldCom executives favourably during allocation of shares in the course oftechnology companies IPOs so as to gain from them lucrative investment banking mandates in a companythat generated more M&A activity in the US between 1995 and 2000 than any other.

²⁵ See ‘Statement by Attorney General Eliot Spitzer Regarding the “Global Resolution” of Wall StreetInvestigations’, Office of New York State Attorney General Eliot Spitzer, 28 April 2003, available atwww.oag.state.ny.us/press/statements/global_resolution.html.

²⁶ The figure was offered by Morgan Stanley and was quoted in Thomas Healey, ‘The Best Safeguardagainst Financial Scandal’ Financial Times, 12 March 2004.

²⁷ K. Eichenwald, ‘For WorldCom, Acquisitions Were Behind Its Rise and Fall’ New York Times, 8 August 2002.

²⁸ eg Enron’s market capitalization before its collapse stood at approximately US$60 billion and, on thebasis of some accounts, in terms of revenue it was the world’s seventh largest industrial company. Its commonshares were traded at an average of US$83 per share in the months before its collapse, when they lost 99% oftheir value. The above figures show how financially painful the Enron catastrophe was for its shareholders. SeeG. Moergenson, ‘How 287 turned into 7: Lessons of Fuzzy Math’, New York Times, 20 January 2002, C.

²⁹ This regulatory and legislative activism has been criticized by various industry, journalistic, and academicsources as the result of over-reaction. See L.E. Ribstein, ‘Market vs. Regulatory Responses to Corporate


and regulatory investigations were launched into the affairs of the affected companies,and some prosecutions have already taken place. This is, in fact, a field, where the nowfamous New York State Attorney General, Eliot Spitzer (‘a modern day Elliot Ness’)has clearly excelled. Legislative responses to the aforementioned abuses included theenactment in the US of the Sarbanes-Oxley Act of 2002. This is a rather voluminouspiece of legislation that has sprouted the most far-reaching reform of US securitiesregulation since the New Deal Statutes (Securities Act 1933, Securities and ExchangeAct 1934). The main purpose of Sarbanes-Oxley was to help financial markets,through the implementation of stricter monitoring and policing mechanisms, toregain their legitimacy. The second explanation that may be offered for the increasedregulatory activism is informed by the theory that economic recessions increasedemand for regulatory intervention.³⁰ The end of the stock ‘bubble’ and the eruptionof the aforementioned corporate frauds were followed by a short period of economicstagnation, which affected most major Western economies. This loomed large in thethoughts of both consumers and policy-makers, providing the necessary justificationfor the imposition of stricter securities laws.

At the same time, the UK and the rest of the EU have witnessed regulatory changesof seismic proportions. First the EU has passed a very large volume of new financialservices legislation in the course of the implementation of the EC Financial ServicesAction Plan (FSAP).³¹ The FSAP intended to create a truly integrated market forfinancial services in the EU and to meet the regulatory challenges of the twenty-firstcentury. The new EC legislation ranges from the remodelling of the regime for the freeprovision of financial services³² to new rules on market integrity, which include theEC Market Abuse Directive³³ and its ‘Level 2 Implementing Measures’.³⁴ Secondly,the UK has implemented FSMA 2000, which changed radically the supervisory edi-fice, and form and content of UK financial services regulation. Admittedly, the newEC legislation came about in a pre-charted way, as a result of the promulgation of theFSAP, rather than as a reaction to the excesses and abuses of the ‘bubble’ era.Nonetheless, in many respects the legislation was seriously influenced by this experience, both in terms of direction and rule content.³⁵


Fraud: A Critique of the Sarbanes-Oxley Act of 2002’ (2002) 28 Iowa J CL 1. See also the leading articlein The Economist on the subject: ‘The Wickedness of Wall Street, An Overreaction to it Poses Riskfor America’s Highly Successful Equity Markets’, The Economist, 8 June 2002, 11–12. See alsoL.A. Cunningham, ‘Sharing Accounting’s Burden: Business Lawyers in Enron’s Dark Shadow’ (2002) 57Business Lawyer 1421.

³⁰ For a very interesting discussion of this issue and a spirited and inspired defence of financial markets,in a context that allows a degree of government intervention and raises the challenge of how such interventionwould be to the benefit of all, see R. Rajan and L. Zingales, Saving Capitalism from the Capitalists:Unleashing the Power of Financial Markets to Create Wealth and Spread Opportunity (New York: RandomHouse, 2003) chs 6, 11, 13.

³¹ Commission Communication, Financial Services: Implementing the Framework for FinancialMarkets: Action Plan, COM(1999)232.

³² Directive 2004/39/EC of 21 April 2004 on financial instruments markets, amending CouncilDirectives 85/611/EEC and 93/66/EEC and Directive 2000/12/EC and repealing Council Directive93/22/EEC [2004] OJ L145/1. ³³ See n 13 above.

³⁴ See Ch 6, n 2 below.³⁵ An extensive analysis of the new EC regime for market abuse is offered in Ch 6 below.


1. Introduction 11

1.3 Scope and Structure

1.3.1 Analysing and Reconceptualizing Market Abuse

This book is a legal and economic study of the market practices offences of insider dealing and market manipulation. It intends to provide a comprehensiveanalysis of:

(a) the economic forces and motives shaping the two practices (offences);

(b) the economic efficiency³⁶ (market welfare) and moral (fairness) rationales fortheir regulation; and

(c) the UK’s (legal and regulatory) regime dealing with market abuse and the marketintegrity regime that has emerged in the EU following the implementation ofthe Market Abuse Directive and other pertinent EC legislation.

Drawing conclusions from the above analyses, the book offers a new definition ofmarket manipulation. This constitutes a reconceptualization of market manipulationboth as a form of economic behaviour and as a legally punishable offence. It alsoprovides policy proposals for a reduction of the level of market abuse and improveddeterrence in the UK and in the rest of the EU.

If we assume wide and effective use of information technology communications(ITC) as an all pervasive, but constant factor, and we also assume that technologicalbreakthroughs of such influence on the markets as that exercised by the discovery oftelegraphic message transmission, the telephone or of ITC will not arise in the nearfuture, then the most important influences on modern day financial markets comefrom the continuous interplay of six variable factors:

(a) market structure and micro structure;

(b) market actors;

(c) factors that exert short-term influence, such as developments in corporate performance and trading trends;

(d) market factors with longer-term influence, such as macroeconomic develop-ments, national or global growth rates, and monetary policy;

(e) the legal and regulatory environment; and

(f ) investor attitudes (biases) influenced by external factors (such as a governmentalchange, an optimistic press) as well as by any of the above factors.

The book examines closely factors (b), (c), and (e) in its attempt to shed light on thevery complex web of legal and economic relationships that shape the economic phe-nomenon of market abuse as well as the rationales for its regulation. All other factors,and, in particular, factor (f ) (investor attitudes) will be given due consideration, wherethat is required for the purposes of the present analysis.

³⁶ For an analysis of the different definitions of efficiency see R. Cooter and T. Ulen, Law and Economics(Glenview, Ill: Scott, Foresman & Co, 1988) 17 and Posner, Economic Analysis, n 38 below, 13–16.


This book is not a chronicle of the long history of market abuse. Descriptions ofpast manipulations, bubbles and other disingenuous and harmful to the markets’schemes, which are admittedly fascinating to read and very instructive to modern dayinvestors, will be offered in a very concise form and only where they are necessary forthe comprehensive analysis of the mechanics of the different species of market abuse(see Chapters 3 and 4).

Inevitably, an analysis of market abuse starts from a discussion of its constituentpractices as economic phenomena. The legal analysis of the practices that are perceivedas market abuse and the necessity of their prohibition, as a legal and regulatory goal,follows the relevant economic analysis. The legal tests used to describe insider dealingand market manipulation (and the corresponding terminology) do not always followthe findings of economic analysis and for this reason they should be examined sep-arately. Any regime that prohibits and punishes insider dealing and market manipula-tion will continue to be ineffective for as long as the mechanics of the offences and thecharacteristics of likely offenders remain unexplored. For this reason, the book offers aconceptual analysis of the mechanics of insider dealing and market manipulation,namely of the economic forces that shape these practices and of their characteristics(see Chapters 2, 3, and 4). In this context, it closely examines the relationship betweencorporate governance failures and market abuse, speculative bubbles and marketmanipulation, and market manipulation and insider dealing. It delineates the concep-tual boundaries between the above pairs of market phenomena. It also discovers theexistence of very strong links and reciprocal feedback (exacerbating and prolonging)effects, which bind together:

(a) corporate frauds and market abuse;

(b) failures in corporate governance systems and the occurrence and frequency ofmarket abuse;

(c) stock ‘bubbles’ and market manipulation; and

(d) market manipulation and insider dealing.

It finds that the link between insider dealing and market manipulation is so strong asto justify the regulation of the former, despite strong objections to the regulation ofinsider dealing expressed by the majority of law and economics scholars.

The relationship between market manipulation and ‘stock market bubbles’ seems toinvolve a considerable degree of interdependence. The use of manipulative devices andtechniques feeds stock ‘bubbles’, prolonging their duration and intensifying price‘spikes’. ‘Bubbles’, in turn, seem to create the right conditions for the perpetration ofmarket manipulation and the concealment of abusive practices that involve, inter alia,dealing by insiders (see Chapter 3).

On the basis of an extensive review of the letter and the spirit of past and presentdefinitions of market manipulation found in relevant legal and regulatory prohibitionsand in relevant academic works, the book (see Chapter 4) formulates a new definitionof market manipulation, which it describes as:

Behaviour effected through any one, or a combination of any of the following: misrepres-entations and other false statements or concealments, artificial transactions, and trading



1. Introduction 13

schemes, which are made or structured in such a way as to induce market participants toengage in the trading of financial investments or the exercise of rights in financial invest-ments. Relevant trading must be in such a direction or the exercise of rights must beeffected in such a way, as to either lead the price of these investments to an artificial level,and/or enable the perpetrators of the behaviour to materialize, from interests held in thespecific or related investments, financial gains that would not be possible, in the absenceof such behaviour.

In the same context, the book offers a comprehensive and systematic classification ofthe different forms of market manipulation (Chapter 4). This classification is based onthe analysis of their mechanics and economic effects, in order to assist our understandingof this practice (offence) and facilitate its deterrence and punishment.

The book continues along the same line of enquiry with an examination of the eco-nomic and moral rationales for the prohibition and punishment of insider dealing andmarket manipulation (Chapter 5). It gives particular emphasis to the economic analysis ofthe prohibition of insider dealing and of forms of price manipulation, which in economicterms are viewed as plain, though excessive, speculation. The use of the methodologicaltools of economic analysis in evaluating the effect of these rules on market welfare isalmost a one-way road. Whatever reservations one may have about the endorsement ofeconomics in the study and analysis of law,³⁷ the area of securities regulation should beseen as one of the most appropriate for such studies. In fact, the contribution of economicanalysis³⁸ to our understanding of certain areas of law has been invaluable.³⁹ It is hard, forinstance, to study and apply the rules of competition (antitrust) law without making reference to the economic theories that led to their development.

³⁷ eg Professor Bainbridge notes, regarding the association of law and economics with the conservativewing of the political spectrum: ‘economic analysis of the law is not an intrinsically conservative methodology.Neoclassical economic analysis’ association with the right derives from two sources: (1) many of economicanalysis’ most prominent practitioners are to be found on the political right; and (2) the philosophical under-pinnings of neoclassical economic analysis resemble principles of classical liberalism that the left has dis-avowed, most notably a belief in the efficiency and justice of organizing society on the basis of voluntarymarket transactions, rather than by state fiat’. S.M. Bainbridge, ‘Mandatory Disclosure: A BehavioralAnalysis’ (2000) 68 Univ Cin LR 1023, 1027 (hereinafter Bainbridge, Behavioral Analysis). On the origins ofthe Law and Economics movement and its development until 1995 see N. Duxbury’s unsurpassable study:Patterns of American Jurisprudence (Oxford: Oxford University Press, 1995) ch 5, esp 330–345.

³⁸ R.A. Posner, Economic Analysis of Law (New York: Aspen Publishers, 6th edn, 2003) (hereinafterPosner, Economic Analysis). The classic work on the economic analysis of regulation in European scholarshipis A.I. Ogus, Regulation, Legal Form and Economic Theory (Oxford: Clarendon Press, 1994). Other influen-tial works on corporate regulation have been Cheffins, Company Law (n 14 above) and E. Ferran, CompanyLaw and Corporate Finance (Oxford: Oxford University Press, 1999).

³⁹ The emergence of ‘new’ or ‘modern’ law and economics is directly associated, perhaps unintentionally,as far as the respective authors were concerned, with two seminal pieces of scholarship: R.H. Coase, ‘TheProblem of Social Cost’ (1960) 3 JLE 1 and G. Calabresi, ‘Some Thoughts on Risk Distribution and theLaw of Torts’ (1961) 70 YLJ 499. The fact that Coase was honoured with the Nobel prize in economics and Galabresi has been, along with Posner—probably the true founder of law and economics both as anintellectual movement and as a distinct academic discipline—among the most celebrated American juristsof the second half of the 20th century, provides an indication of the degree to which the law and economicsmovement (in its multiple facets) has influenced academic and judicial thinking and of the intellectualstature of its pioneers. For a quantitative analysis of the influence of economic theory on the study of law see W.M. Landes and R.A. Posner, ‘The Influence of Economics on Law: A Quantitative Study’ (1993) 36JLE 385.


The benchmark of efficiency used here to evaluate relevant legal rules is ‘Kaldor-Hicks’efficiency,⁴⁰ since it is assumed that Pareto ‘optimality’ cannot be achieved in the con-text of financial market regulation.⁴¹ Thus, what is examined here is whether the totalbenefits produced by the examined rules exceed their total costs, so that enough sur-plus is left by the application of the rules in question to (notionally) compensate thosethat incur the costs and as a result become worse off.

This book does not suggest that markets move only on the basis of rationalexpectations, or that individuals are merely rational utility maximizers, namely thatthey make rational choices to maximize satisfaction.⁴² The proverbial rational man ofneoclassical economics⁴³ (the famous ‘homo economicus’) supposedly acts to max-imize expected utility because his/her preferences are given, consistent, and rep-resentable in the form of a utility function. Individuals know a priori the set ofalternative actions available to them and choose the action with the highest utility orexpectation of utility. Where individuals operate in conditions of uncertainty aboutthe results of their actions, they are able to assess the probability distribution inaccordance with their level of knowledge. If new information can be collected fromthe environment, individuals know the information’s possible content and can assess,in accord with Bayes’ famous theorem, the probability distribution based on the inter-play between the new information’s content and their prior knowledge.⁴⁴ However, inthe very complex environment of modern financial markets such assumptions seemquite far fetched, given the additional impact of investor cognitive limitations such as‘bounded rationality’ and ‘heuristics’ (see Chapter 2, Sections 2.3.3 and 2.4.2). In fact,behavioural analysis is particularly relevant in the examination of the mechanics ofmarket abuse and rationales for its regulation.

There is an ever-increasing volume of literature on the challenges that behaviouralanalysis places on the traditional rational choice model of economic behaviour.⁴⁵ This


⁴⁰ N. Kaldor, ‘Welfare Propositions of Economics and Interpersonal Comparisons of Utility’ (1939) 49Economic Journal 549; J.R. Hicks, ‘The Valuation of Social Income’ (1940) 7 Economica 105. For this andother ‘pioneering contributions to general economic equilibrium theory and welfare theory’, Hicks wasawarded jointly with Kenneth Arrow of Harvard University, the Bank of Sweden Prize in EconomicSciences in Memory of Alfred Nobel in 1972.

⁴¹ Pareto ‘efficiency’ (named after Vilfredo Pareto, an eminent Italian 19th century economist who for-mulated it) means that a transaction or decision is ‘efficient’ if the change associated with such transactionor decision ‘will make somebody better off while no one loses’. Cheffins, Company Law (n 14 above) n 35.On the virtual impossibility to achieve ‘Pareto frontier’ efficiency in corporate and financial regulation seeCheffins, Company Law (n 14 above), 14–26 and n 35.

⁴² The classic work is Professor G.S. Becker’s The Economic Approach to Human Behavior (Chicago:University of Chicago Press, 1976). For a critique of the rational choice assumption in human decisionmaking, see A. Tversky and D. Kahneman, ‘Rational Choice and the Framing of Decisions’ (1986) 59 J Bus251–254.

⁴³ The term ‘neoclassical economics’ is predominantly used to describe the synthesis between the writingsof liberal free market theorists, the assumptions made in Alfred Marshall’s microeconomics, and theKeynesian version of macroeconomics.

⁴⁴ For a very good formulation of the meaning of rational utility maximization and a relevant discussion,see R.A. Prentice, ‘Chicago Man, K-T Man, and the Future of Behavioral Law and Economics’ (2003) 56Vand LR 1663, 1665, n 4 (hereinafter Prentice, Future of Behavioral Law and Economics).

⁴⁵ See Posner, Economic Analysis (n 38 above) 18–20. See also Jennifer Arlen et al, ‘Endowment Effects,Other-Regarding Preferences, and Corporate Law’ SC Law School, Olin Working Paper No 00–2, 2000,


1. Introduction 15

literature, drawing on experimental economics and cognitive psychology, highlightsindividuals’ decision-making biases, namely, tendencies to draw judgments or makedecisions that systematically depart from the neoclassical economist’s rationalchoice/expected utility model. Cognitive psychologists and behavioural researchers‘claim not merely that we sometimes fail to abide by rules of logic, but that we fail todo so in predictable ways’.⁴⁶ Cognitive biases (better described as illusions) ‘are notlimited to the uneducated or the less intelligent’. In fact, they affect every individual‘with uncanny consistency and unflappable persistence’.⁴⁷ Thus, such systematicdepartures from rational decision-making could be observed even in marketcontexts.⁴⁸ Moreover, relevant studies include, inter alia, attempts to introduce elements of behaviouralism in law and economics⁴⁹ and in the analysis of legislativeand judicial decision-making,⁵⁰ including the analysis of securities regulation.⁵¹ Thevolume and quality of interesting and innovative works in this area has led influentialscholars to speak about the emergence of a new (behavioural) law and economics movement.⁵²

Behavioural analysis has not yet developed a unitary theory that explains or predicts the full range of human behaviour,⁵³ as rational choice theory⁵⁴ claims todo.⁵⁵ Yet its findings, however disputed and uncertain because of their experimental

noting that behavioural research has in the past five years ‘risen from virtually nowhere to occupy the centerstage of interdisciplinary legal scholarship’, also available at http://papers.ssrn.com/sol3/papers.cfm?abstract id_224435.

⁴⁶ J.D. Hanson and D.A. Kysar, ‘Taking Behavioralism Seriously: The Problem of MarketManipulation’ (1999) 74 NYU LR 630, 633. ⁴⁷ ibid.

⁴⁸ See also Sections 2.3.3(a), 2.4.2, and 2.4.3 below.⁴⁹ See C. Jolls, C.R. Sunstein, and R. Thaler, ‘A Behavioural Approach to Law and Economics’ (1998)

50 Stan LR 1471; C. Jolls, ‘Behavioral Economics Analysis of Redistributive Legal Rules’ (1998) 51 VandLR 1653. See also the response by Posner and Kelman and their (differing) arguments for rejecting the useof behaviouralism in law and economics and legal analysis in general: R.A. Posner, ‘Rational ChoiceBehavioral Economics and the Law’ (1998) 50 Stan LR 1551 (hereinafter Posner, Rational Choice); M. Kelman, ‘Behavioral Economics as Part of a Rhetorical Duet: A Response to Jolls, Sunstein and Thaler’(1998) 50 Stan LR 1577. See also R.B. Korobkin and T.S. Ulen, ‘Law and Behavioral Science: Removingthe Rationality Assumption from Law and Economics’ (2000) 88 Cal LR 1051 (hereinafter Korobkin andUlen, Law and Behavioral Science).

⁵⁰ See C.R. Sunstein, ‘Behavioral Analysis of Law’ (1997) 64 Univ Chi LR 1175; J.J. Rachlinksi, ‘The“New” Law and Psychology: A Reply to Critics, Skeptics, and Cautious Supporters’ (2000) 85 Corn LR 739.

⁵¹ For applications of behavioural economics to securities regulation, see D.C. Langevoort, ‘Taming theAnimal Spirits of the Stock Markets: A Behavioral Approach to Securities Regulation’ (2002) 97 NwU LR135; R.B. Thompson, ‘Securities Regulation in an Electronic Age: The Impact of Cognitive Psychology’(1997) 75 Wash ULQ 779.

⁵² C.R. Sunstein, ‘Behavioral Law and Economics: A Progress Report’ (1999) 1 ALER 115. See alsoD.C. Langevoort, ‘Behavioral Theories of Judgment and Decision Making in Legal Scholarship: A Literature Review’ (1998) 51 Vand LR 1499.

⁵³ Also, Professor Prentice, one of the foremost proponents of behavioural law and economics, notessomewhat apologetically: ‘Unlike law and economics in its more extreme forms, legal decision theory doesnot purport to explain why the law is as it is or to provide a universal normative standard. It does not pur-port to offer an entirely new paradigm.’ Prentice, Future of Behavioral Law and Economics (n 44 above)1766–1767.

⁵⁴ See Posner, Economic Analysis (n 38 above) 17–18; R.A. Posner, The Problems of Jurisprudence(Cambridge, Mass: Harvard University Press, 1990) 353. See also for a review of the literature, T.S. Ulen,‘Rational Choice and the Economic Analysis of Law’ (1994) 19 LSI 487.

⁵⁵ Korobkin and Ulen, Law and Behavioral Science (n 49 above) 1071–1073.


nature,⁵⁶ do improve our understanding of investor behaviour in financial marketsand of the causes of ‘stock market bubbles’ (see Chapter 2, Sections 2.4.2 and 2.4.3).As a result, where necessary, appropriate reference is made to the views of behaviourallaw and economics in respect of the function, direction, and rationales of economicregulation, including segments of securities regulation such as rules on mandatory disclosure and the prohibition of market manipulation (see Chapter 5).

Notwithstanding the above, this book argues that, because of the particularity of theirmotives and the relatively sophisticated nature of relevant abusive schemes, ‘rationalchoice’ theory constitutes the most useful tool in explaining the behaviour of perpetratorsof market abuse. Various explanations have been offered regarding the particular erasand circumstances that provide the stimulus for the generation of ‘swindles’, includinglarge-scale manipulations.⁵⁷ None of these approaches provides a totally satisfactoryexplanation of occurrence of fraud. What emerges, however, from the relevant studies isthat, first ‘swindlers’ are rational utility maximizers especially when such ‘swindlers’ arefinancial market professionals58 and secondly that the mechanics of each of theseschemes (including insider dealing and market manipulation) are both different in theirdetails and quite similar in their basic structure and motive: demand for quick profitthrough the (potential) use of grand-scale deception, if circumstances allow it.Therefore, sanctions aiming at the effective deterrence and punishment of abusivebehaviour are properly implemented only when they are designed to deter and punish(potential) offenders who act as rational utility maximizers (see Chapter 9).

Moral considerations in the prohibition of insider dealing and market manipulation,especially arguments concerning market fairness, are also discussed (see Chapter 5).The debate about the regulation of insider dealing is largely inconclusive: (a) argu-ments about insider dealing’s role in enhancing market efficiency remain empiricallyunproven and (b) moral justifications for its prohibition seem divorced from the real-ities of modern financial markets. Thus, a suggestion is put forward for the resolutionof this intractable dilemma through resort to the ‘social norms’ theory, which wouldhelp to highlight societal preferences on the issue. The tools and principles ofelectronic governance could be used to identify societal attitudes towards insider deal-ing of the social groups concerned: retail and institutional investors; professionaltraders; company employees and directors; company creditors; and even savers holdinginvestments through participation in a collective investment vehicle. Endorsement of


⁵⁶ Posner, Rational Choice (n 49 above) 1566; see also J. Arlen, ‘Comment: The Future of BehavioralEconomic Analysis of Law’ (1998) 51 Vand LR 1765, 1769: ‘we cannot be confident that an observed biasreally does affect actual decisions—as opposed to being simply an artifact of experimental design—until wecan explain why the bias exists’.

⁵⁷ eg views differ as to whether ‘swindles’ are demand or supply driven, appear more frequently in timesof economic crisis or economic euphoria, or follow financial displacements, etc. See Kindleberger, Manias,Panics and Crashes (n 1 above) 38–41, 73–81.

⁵⁸ This assumption is, in fact, in full accord with admissions made by Professors Jolls, Thaler, andSunstein (all among the foremost proponents of ‘behavioural (cognitive) law and economics’), which foundthe behaviour of participants in futures markets to be consistent with the predictions of rational choice the-ory, because: (a) most traders are acutely aware that the effect of ‘frequent errors’ in the context of their trad-ing activities on their jobs is high; (b) the costs of arbitrage in futures markets are low; and (c) futuresmarkets are ‘professionals’ markets, which offer ‘frequent opportunities for learning’. See Jolls, Sunstein,and Thaler (n 49 above) 1486.


1. Introduction 17

requisite social norms in the regulation of insider dealing could provide a resolution toa very difficult issue, which is in accord with the tradition of democratic representa-tion and reflection of the majority’s preferences on Parliamentary legislation and, inprinciple, in public agencies’ regulation (see Chapter 5).

The legal and regulatory environment that constitutes the principal focus of thebook is shaped by relevant EC legislation and the UK’s legal and regulatory rules targeting the deterrence and punishment of market abuse. Therefore, Part II of thebook offers an extensive and critical analysis of the respective regimes (see Chapters 6to 8). US case law and relevant academic literature is extensively utilized in order tobroaden and enrich this analysis. The conclusions of the economic analysis of themechanics of insider dealing and market manipulation and of their regulation that areoffered in Part I of the book will be properly incorporated into a critical evaluation ofthe EC and UK legal rules dealing with market abuse.

In 1999 the EU started a major effort to create a truly harmonized legislative framework for financial services with the publication of the FSAP. One of the mainobjectives of the Action Plan was the enactment of a directive prohibiting market abuse.The Market Abuse Directive provides framework rules for the prohibition of insiderdealing and market manipulation on an EU-wide basis, abolishes selective disclosure,and creates a new regime for the fair presentation of analysts’ recommendations and dis-closure of their conflicts of interests.⁵⁹ It also mandates the timely disclosure by issuers ofinside information (see Chapter 6).⁶⁰ Arguably, a number of rules within the new ECmarket abuse legislation may lead to the establishment in many EU jurisdictions of a pri-vate law enforcement regime and possibly this will happen by default. The interaction ofthe duty of market players to prevent market abuse,⁶¹ as provided in the Directive, aswell as the duties of ‘fair presentation’ of investment recommendations⁶² and disclosureof conflicts of interest by the producers and disseminators of such recommendations⁶³with general rules of liability under the Civil code and the Securities Laws of severaljurisdictions could lead to the establishment in the majority of Member States of a civilliability regime for market manipulation (see Chapter 6).

In the UK, FSMA 2000, which has based UK financial services regulation on atotally new footing abolishing most elements of self-regulation, has also introduced anew regulatory offence of market abuse, comprising both insider dealing and marketmanipulation. In the context of the UK’s implementation of the Market AbuseDirective and its Level 2 Implementing Measures, the offence of market abuse undersection 118 of FSMA 2000 has been redrafted to incorporate the offences of insiderdealing and market manipulation as prescribed in the Directive.

FSMA 2000 equips the Financial Services Authority (FSA) with extensive supervisoryand enforcement powers in a number of areas including market abuse. On the basis ofits FSMA mandate, the FSA has drafted detailed rulebooks in a number of areas aspart of its regulatory handbook. The FSA’s Handbook is voluminous and includes,inter alia, a Code of Market Conduct (COMAC), which clarifies the scope of section118, an Enforcement Manual (ENF), which prescribes the FSA’s enforcement powers,

⁵⁹ Market Abuse Directive, Art 6(5). ⁶⁰ ibid, Art 6(1). ⁶¹ ibid, Art 6(6).⁶² ibid, Art 6(5). ⁶³ ibid.


including the kind of sanctions it may impose for market abuse, and a Conduct ofBusiness rulebook (COB), which deals with regulated firms’ conduct of business withtheir clients and certain forms of financial promotion (see Chapter 7). Although theintroduction of civil law remedies for market abuse could substantially improve theeffectiveness of the prohibition, the UK’s new market abuse regime does not bringabout a serious change from the previous regime, which afforded very limited roomfor private remedies (see Chapter 8). As a result, there is no civil right of actionafforded to injured investors in connection with specified forms of market abusewhich occur beyond the stage of public offer/listing of securities, as, for instance, inthe course of aftermarket trading.

Finally, on the basis of the preceding dual (economic and legal) analysis of marketabuse, a number of policy proposals are formulated in Chapter 9. Relevant proposals recommend the relaxation of rules prohibiting certain forms of price manipulation,and the reinforcement of the civil liability regime in the UK and the rest of the EUwith the introduction of properly calibrated civil remedies (rights of action). Civilremedies may augment public enforcement efforts and strengthen the deterrent effectof the relevant regulatory regime. The adoption of relevant proposals is very importantfor two reasons.

First, the deterrence and punishment of market abuse is no simple matter. While,investor ‘speculative mania’ might play a major role in the creation of asset bubbles,this may not, at any rate, lead to the conclusion that fraud and deceit may be toleratedwithin the boundaries of a properly functioning free market economy. However, likeother forms of what is called ‘economic crime’, market abuse is a ‘bloodless’ crime,often perpetrated by highly sophisticated economic players. Thus, the decision-making process that leads to the perpetration of the abuses is mostly based on rationalcalculations. Accordingly, effective deterrence may be achieved only if attendantsanctions and the frequency of their imposition are such as to minimize the expectedbenefit from the perpetration of abusive market practices. For a number of comment-ators both the recent ‘stock bubble’ and the abuses that have been associated with itand tarnished the reputation of the US stock markets could be partially attributed tothe relaxation of the private enforcement regime for securities fraud,⁶⁴ following theenactment of Private Securities Litigation Reform Act.⁶⁵ This Act created, inter alia, avery strong safe harbour for forward statements (namely, future earning forecasts)encouraging the issuing of overoptimistic (earnings) statements, which contributedsignificantly both to the creation of the bubble and the perpetration of the frauds discussed above.

Secondly, the abuses and excesses of the ‘bubble’ years and the ‘bear market’ thatfollowed them serve as a strong reminder that financial markets thrive or declinedepending on the level of confidence investors have in them. Hence, realistic policyproposals, which assist in the deterrence of market abuse, benefit both the efficient


⁶⁴ J.C. Coffee, Jr, ‘What Caused Enron? A Capsule Social and Economic History of 1990’s’, ColumbiaLaw School, The Center for Law and Economic Studies, Working Paper No 214, 20 January 2003, availableat www.law.columbia.edu/law-economicstudies.

⁶⁵ Private Securities Litigation Reform Act 1995, Pub L No 104–67, §§ 101(b), 109 Stat 737 (1995).


1. Introduction 19

and fair operation of modern financial markets and restore (or preserve) investor confidence—raising, in the process, the degree of legitimacy that financial markets must enjoy in the eyes of global society as a very powerful economic tool andinstitution.

1.3.2 Structure

This book is divided in three Parts. Part I deals with the economic analysis of marketabuse and of its regulation. It examines the mechanics, devices, and techniquesemployed in the perpetration of insider dealing and market manipulation and discusses the techniques and objectives of market abuse regulation and its welfareeffects. Part I comprises the present Introduction and Chapters 2 to 5. Part II offers anextensive examination of the EU’s emerging regime for the regulation of market abuse,of the UK’s legal and regulatory regime dealing with market abuse, and of civil lawremedies available to injured investors in the UK. It comprises Chapters 6, 7, and 8.Part III offers a number of proposals for the more effective deterrence of market abuseand comprises Chapters 9 and 10.

More analytically: Chapter 2 deals with modern financial markets and finance theory. It is divided into three main parts. The first part provides a brief analysis ofmodern financial markets (including futures markets), their functions, main traderconstituents, and instruments traded on them. It also describes contemporary develop-ments in financial asset trading and investment techniques. These techniques and theuse of ITC create increased opportunities for the perpetration of market abuse. The sec-ond part offers a brief discussion of modern finance theory, charting its evolution andexplaining the effect of information on the price of securities and other financial instru-ments. It focuses on the fundamental assumptions of the well-known Efficient CapitalMarket Hypothesis (ECMH) portfolio theory and of the capital asset pricing model.The same part discusses the fundamental assumptions of ‘behavioural finance’ and‘chaos theory’. It highlights behavioural finance arguments that stress the cognitiveaspects of investor behaviour and strongly undermine the validity of the ECMH. Therelevant debate lays the foundations for an extensive exploration in the third part of thischapter of the causes of stock market ‘bubbles’ through the use of both rational choiceand behavioural theory analysis.

Chapter 3 is in two parts. The first part offers an economic analysis of insider dealingin an attempt to explore its mechanics and the economic forces that shape this practice.The second part provides an extensive and in-depth discussion of the relationshipbetween market manipulation and stock bubbles, corporate governance failures andthe occurrence of market abuse, and insider dealing and market manipulation.

Chapter 4 is also divided into two main parts. The first part discusses traditional definitions of market manipulation. On the basis of this discussion, it offers a remod-elled definition of market manipulation, which is both workable and constitutes areconceptualization of the relevant practice (offence). The second part provides anextensive and systematic classification of different forms of market manipulation basedon their mechanics and economic effects. All further analysis of market manipulationin the book is based on this categorization.


Chapter 5 deals with the theoretical framework for the regulation of market abuse.It is divided into six main parts. The first part provides a general analysis of theories ofregulation and of the objectives of financial market regulation. The second partdebates the economic rationales and welfare effects of mandatory disclosure. The thirdpart engages in a similar discussion of the merits of market transparency rules. Thefourth part offers an extensive analysis of the academic debate regarding the regulationof insider dealing. The fifth part explains the rationales for the prohibition of marketmanipulation and formulates a proposal for the deregulation of forms of trade-based(price) manipulations, which represent excessive speculation rather than market disto-rtion. Rationales of morality and fairness, which underscore the prohibition of insiderdealing and market manipulation, are also discussed in the context of the relevantanalysis. Finally, the sixth part discusses the effectiveness of exchange self-regulation inthe deterrence of market manipulation. This analysis evaluates exchange self-regulationboth historically and in the light of recent market developments such as increasingintegration between global financial markets and the emergence of privately ownedexchanges.

Chapter 6 deals with the emerging EU market abuse regime. It is divided into threemain parts. The first part provides a concise discussion of the evolution of EC finan-cial market regulation. The second part engages in an analytical discussion of theregime created by the EC Market Abuse Directive and its Level 2 ImplementingMeasures. The third part deals with provisions within other EC legislative instru-ments, such as the Public Offers and Admissions Prospectus Directive⁶⁶ and theTransparency Directive⁶⁷ that complement the EU’s market abuse regime. The chap-ter argues that the Market Abuse Directive may lead, in conjunction with general(civil) law provisions in EU Member States, to the creation of a new right of action formarket manipulation in many European legal systems.

Chapter 7 covers the UK’s legal and regulatory regime for market abuse and isdivided into three main parts. The first part provides a comprehensive discussion of the UK statutory and case law dealing with insider dealing and market manipula-tion. The second part provides an extensive analysis and a critical evaluation of theUK’s regulatory regime dealing with market abuse. The third part provides an outlineof the FSA’s powers in dealing with market abuse and of judicial and regulatory remedies.

Chapter 8 deals with remedies afforded to injured investors to obtain civil redressfor market abuse in the UK under applicable statutory law, at common law, and inequity. It highlights the severe difficulties that aftermarket traders face in order to exer-cise statutory, common law, equitable, or restitutionary remedies for misrepresenta-tions or other actionable forms of market abuse. The chapter is divided into threemain parts. The first part describes civil remedies that could be available to injuredinvestors under relevant FSMA 2000 provisions and other statutory rules. It discusses


⁶⁶ Directive 2003/71 on the prospectus to be published when securities are offered to the public oradmitted to trading and amending Directive 2001/34/EC [2003] OJ L 345/64.

⁶⁷ Directive 2004/109/EC of 15 December 2004 on the harmonisation of transparency requirements inrelation to information about issuers whose securities are admitted to trading on a regulated market andamending Directive 2001/34/EC [2004] OJ L390/38.


1. Introduction 21

the Act’s failure to provide a (general) civil right of action afforded to aftermarkettraders that incur losses in the context of an abusive scheme that constitutes eitherinsider dealing or market manipulation. The second part deals with common lawremedies for insider dealing and market manipulation, which injured investors couldpotentially use, for example, the tort of deceit. The third part deals with equitable andrestitutionary remedies that could potentially be available to victims of insider dealingand/or market manipulation schemes.

Chapter 9 discusses the role of private law enforcement in the deterrence of marketabuse. In the UK, civil liability for market abuse has traditionally been associated withserious concerns about its effectiveness and desirability. In order to test these concerns,Chapter 9 undertakes an extensive (mostly economic analysis-based) evaluation of themerits of civil remedies as effective means of enforcement and deterrence of marketabuse. This analysis draws heavily on the US experience in the misuse of civil actionsfor financial market fraud, which led to the introduction of statutory restrictions. Itargues that the US system presented particular pathogenies that could be easilyavoided by other legal orders. Restrictions on the right to settle and the inability of UKinvestors to file class actions could filter out unmeritorious claims. This could lead to acivil enforcement regime that would be largely free from vexatious litigation. Theeffectiveness of such a regime is very much dependent on the endorsement of thefraud-on-the-market presumption of (indirect) reliance. The form of the presumptionsuggested here is much narrower than the version adopted by the US Supreme Courtin Basic v Levinson.⁶⁸ Thus, it does not incorporate the potentially controversialassumptions of the ECMH. It is argued that properly calibrated civil remedies consti-tute a more efficient means of enforcement than criminal law sanctions in most casesof market abuse, with the exception of large-scale frauds, which call for criminalenforcement. In addition, civil remedies augment effectively regulatory efforts todeter insider dealing and market manipulation, allowing injured investors to obtainjust compensation.

Finally, Chapter 10 brings to a coherent conclusion the answers offered to thedifferent lines of enquiry pursued by the present study. Thus, it offers a number ofpolicy proposals that would facilitate the deterrence and punishment of market abuse,as well as enhance the efficient function of contemporary financial markets. In thiscontext, it explains the need to find different regulatory techniques to restrainexcessive speculation, since the use of the price manipulation prohibition for thispurpose stretches unnecessarily the boundaries of market abuse regimes. Tradingpractices that do not ultimately distort the integrity of the market’s price formationmechanism should be deregulated.

⁶⁸ 485 US 224 (1988).


the mechanics and regulation of market abuse

Documents