The market abuse control legislative regime of South Africa, Nigeria and the United Kingdom - an approach to regulation and monitoring in relation to certain aspects of the financial markets of South Africa

Abstract

The regulation of market abuse is currently an ever evolving subject, to such an extent that it has been placed as a high priority for regulators worldwide.¹ The Financial Markets Act 19 of 2012 (FMA) of South Africa² prohibits improper practices and is aimed at ensuring that market participants operate in a market that is free, safe and fair. In light of the above and as per example, all members of the stock exchange ensure that they accordingly adhere to the aims of the FMA by exercising functions such as due diligence and having a shared goal in embedding the values entrenched in the FMA.³ The purpose of this dissertation is aimed at assessing the key elements of the transformation process that the South African financial markets have embarked on, since the introduction of the FMA. More specifically, the paper aims to focus on the elements in relation to market abuse practices.⁴ The paper seeks to: 1. provide an overview analysis of the current market abuse control enforcement framework in relation to some selected aspects of the financial markets in South Africa. 2. look at the regulation employed in one of the biggest trading products namely, equities and current lacuna, the legislation that governs high frequency trading under these trading products and in general. 3. review whether regulation in South Africa on market abuse practices are robust enough to deal with key market abuse practices such as insider trading and market manipulation that manifested during the recent global financial crisis. 4. provide a comparative review of the current market leaders regulatory mechanisms on market abuse.