Financial Markets Act, 2012 (Act No. 19 of 2012)Chapter X : Market AbuseOffences80. Prohibited trading practices |
| (1) | No person— |
| (a) | may, either for such person’s own account or on behalf of another person, knowingly directly or indirectly use or participate in any practice which has created or is likely to have the effect of creating— |
| (i) | a false or deceptive appearance of the demand for, supply of, or trading activity in connection with; or |
| (ii) | an artificial price for, |
that security;
| (b) | who ought reasonably to have known that he or she is participating in a practice referred to in subparagraph (a), may participate in such practice. |
| (2) | A person who contravenes subsection (1)(a), commits an offence. |
| (3) | Without limiting the generality of subsection (1), the following are contraventions of subsection (1): |
| (a) | Approving or entering on a regulated market an order to buy or sell a security listed on that market which involves no change in the beneficial ownership of that security, with the intention of creating— |
| (i) | a false or deceptive appearance of the trading activity in; or |
| (ii) | an artificial market price for, |
that security;
| (b) | approving or entering on a regulated market an order to buy or sell a security listed on that market with the knowledge that an opposite order or orders at substantially the same price, have been or will be entered by or for the same or different persons with the intention of creating— |
| (i) | a false or deceptive appearance of the trading activity in; or |
| (ii) | an artificial market price for, |
that security;
| (c) | approving or entering on a regulated market orders to buy a security listed on that market at successively higher prices or orders to sell a security listed on that market at successively lower prices for the purpose of unduly influencing the market price of such security; |
| (d) | approving or entering on a regulated market an order at or near the close of the market, the primary purpose of which is to change or maintain the closing price of a security listed on that market; |
| (e) | approving or entering on a regulated market an order to buy or sell any security which order will be included in any auction during an auction call period and cancelling such order immediately prior to the auction matching, for the purpose of creating— |
| (i) | a false or deceptive appearance of the demand for or supply of such security; or |
| (ii) | an artificial price for such security; |
| (f) | effecting or assisting in effecting a market corner; |
| (g) | maintaining, at a level that is artificial, the price of a security listed on a regulated market. |
| (4) | For the purpose of subsection (1), the employment of price-stabilising mechanisms that are regulated in terms of the rules or listing requirements of an exchange does not constitute a practice which creates an artificial price for securities which are subject to such price-stabilising mechanisms. |
| (5) | For the purposes of subsection 3(a), a purchase or sale of listed securities does not involve a change in beneficial ownership if a person who had an interest in the securities before the purchase or sale, or a person associated with that person in relation to those securities, has an interest in the securities after the purchase or sale. |