have an account?【sign in】Market manipulation definitions: Understanding Market Manipulation in Australia
barrantesauthorMarket manipulation is a controversial topic in the financial world, especially in Australia. It refers to the practice of artificially influencing the price or volume of a security or market to gain an unfair advantage for the manipulator. This article will provide a comprehensive definition of market manipulation and its impact on the Australian market. We will also discuss the legal and regulatory frameworks in place to prevent and detect such activities.
What is Market Manipulation?
Market manipulation is the intentional and deceptive manipulation of the price, volume, or other conditions of a security or market for personal gain. It can involve manipulating the price of a security through false or misleading statements, secret agreements, or other forms of deception. Market manipulation can have severe consequences on the integrity of the market and the investment decisions of investors.
Definitions of Market Manipulation
There are several definitions of market manipulation used in different contexts. Here are some common definitions:
1. Australian Securities and Investments Commission (ASIC): ASIC defines market manipulation as "the deliberate and covert manipulation of the price, volume or other conditions of a financial product or market for the purpose of obtaining an unfair advantage for the manipulator or to harm other market participants."
2. U.S. Securities and Exchange Commission (SEC): The SEC defines market manipulation as "the intentional and fraudulent creation of a false or misleading image of the price or quantity of a security or commodity traded on a national securities exchange or over-the-counter."
3. International Organization of Securities Commissions (IOSCO): IOSCO's Global Standards for Market Surveillance and Investigative Practices state that market manipulation includes "any action or omission which, intentionally or negligently, artificially influences or tries to influence the price, volume, or any other relevant market condition, with the purpose of obtaining an unfair or deceptive advantage for the person or for others or causing damage to other market participants."
Legal and Regulatory Frameworks in Australia
In Australia, market manipulation is a criminal offense and is regulated by the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA). The Australian Securities Exchange (ASX) is also responsible for monitoring and enforcing market manipulation violations.
In 2018, ASIC issued new market manipulation guidelines aimed at strengthening the regulatory framework and reducing the risk of market manipulation in Australia. These guidelines include:
1. Enhanced disclosure and transparency requirements for issuers and market participants
2. Stricter enforcement of market rules and penalties for violation
3. Increased collaboration and information sharing among regulatory agencies
4. Enhanced market surveillance and investigation capabilities of regulatory agencies
Market manipulation is a serious violation of the principles of fair and transparent trading in the financial market. In Australia, the legal and regulatory frameworks are in place to prevent and detect market manipulation activities. However, the risk of market manipulation still exists, and investors and market participants must be aware of the potential risks and take necessary precautions to protect their interests.