In response to questions on how the Market Abuse Regulation (MAR) might apply to information obtained via electoral polling, we set out how we expect firms and individuals to handle any information that has the potential to be inside information. This could include information obtained as a result of polling.
Determining whether information is inside information requires judgement based on the facts at the time. We encourage firms, where appropriate, to take legal advice on specific questions they may have and actions they should take on a case-by-case basis.
It is important to note that all firms and individuals – regardless of whether they carry out regulated financial services activities – fall in scope of our regulatory remit on market abuse.
Inside information
MAR states that inside information is "information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments."
Where the MAR definition of inside information is met, it would be an offence to disclose the information, other than where necessary in the normal exercise of employment, a profession or duties. So too would trading of in-scope instruments on the basis of the information. As noted above, whether or not such information were inside information would need to be judged case by case.
Example: an established polling firm is due to publish polling results and on publication the results are likely to affect the price of government bonds traded on regulated trading venues and meet the other criteria to be classified as inside information. It could then be an offence under MAR to share that information before publication except where necessary “in the normal exercise of employment, a profession or duties”.
It could also be an offence for anyone who had the information to trade in the relevant government bonds in advance of publication of the polling results if they did so on the basis of the anticipated bond price movement that would result from publication.
Where the inside information definition is not met, MAR does not impose a restriction on individuals and firms collecting or receiving polling information relevant to financial market prices even while polls are open.
In addition, trading in spot foreign exchange (FX) is not covered by MAR’s insider dealing provisions. However, in these circumstances, other FCA rules such as the Principles for Business and other legislation may apply and firms should be aware of and comply with all relevant legislation. Trading in spot FX may also be covered by the MAR provisions on market manipulation if the trading affects relevant financial instruments, such as certain spot FX options.
Authorities other than the FCA enforce legislation that falls outside the scope of the FCA’s remit and its enforcement powers.