Section 26Part 1 — Securities Investment Business Act
Defences
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An individual does not commit the offence of insider dealing by virtue of dealing in listed securities or encouraging another person to do so if that person shows —
that that person did not at the time expect the dealing to result in a profit attributable to the fact that the information in question was price-sensitive information in relation to the listed securities;
that at the time that person believed on reasonable grounds that the information had been disclosed widely enough to ensure that none of those taking part in the dealing in the listed securities would be prejudiced by not having the information; or
that that person would have done what that person did even if that person had not had the information.
An individual does not commit the offence of insider dealing by virtue of a disclosure of information if that person shows —
that that person did not at the time expect any person, because of the disclosure, to deal in listed securities; or
that, although that person had such an expectation at the time, that person did not expect the dealing to result in a profit attributable to the fact that the information was price-sensitive information in relation to listed securities.
References to a profit include avoidance of a loss.
The following special defences shall have effect for the purposes of this Part —
a person is not guilty of insider dealing by virtue of dealing in listed securities or encouraging another person to deal if that person shows that that person acted in good faith in the course of —
his business as a market maker; or
his employment in the business of a market maker;
a person is not guilty of insider dealing by virtue of dealing in listed securities or encouraging another to deal if that person shows that —
the information which that person had as an insider was market information; and
it was reasonable for a person in that person’s position to have acted as that person did despite having that information as an insider at the time, and in determining whether it is reasonable for an individual to do any act despite having market information at the time, there shall in particular be taken into account — (A) the content of the information; (B) the circumstances in which that person first had the information and in what capacity; and (C) the capacity in which that person now acts;
a person is not guilty of insider dealing by virtue of dealing in listed securities or encouraging another person to deal if that person shows — 27
that that person acted — (A) in connection with an acquisition or disposal which was under consideration or the subject of negotiation, or in the course of a series of such acquisitions or disposals; and (B) with a view to facilitating the accomplishment of the acquisition or disposal or the series of acquisitions or disposals; and
that the information which that person had as an insider was market information arising directly out of that person’s involvement in the acquisition or disposal or series of acquisitions or disposals.
Market information is information consisting of one or more of the following facts —
that listed securities of a particular kind have been or are to be acquired or disposed of or that their acquisition or disposal is under consideration or the subject of negotiation;
that listed securities of a particular kind have not been or are not to be acquired or disposed of;
the number of listed securities acquired or disposed of or to be acquired or disposed of or whose acquisition or disposal is under consideration or the subject of negotiation;
the price (or range of prices) at which listed securities have been or are to be acquired or disposed of or the price (or range of prices) at which listed securities whose acquisition or disposal in under consideration or the subject of negotiation may be acquired or disposed of; and
the identity of the persons involved or likely to be involved in any capacity in the acquisition or disposal.