Explain the following: Market Abuse

CS Executive · Capital Markets & Securities Laws · PYQS · December 2020
Explain the following: Market Abuse

Answer & Explanation:

Market abuse is a broad term which includes abnormal price/volume movement, artificial transactions, false or misleading impressions, insider trading etc. The department uses various tools to determine normal and abnormal market behaviour. The necessary actions are initiated like imposition of special margin, reduction of circuit filters, trade to trade settlement, suspensions, de-activation of terminals etc. to control abnormal market behaviour. The department carries out investigation, if necessary, based on the preliminary examination/analysis and suitable actions are taken against members involved based on the investigation.

Topics: Securities Market Offences

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