QFMA presents draft code of market conduct for consultation

The Qatar Financial Markets Authority (QFMA) has presented the draft code of market conduct for consultation among dealers in the Qatari financial markets, aimed at enhancing the protection of investors in securities from unfair or improper practices that involve fraud, deception or manipulation.

The code of market conduct, which is in line with the QFMA's strategic objectives to develop the capital market and enhance its participants' confidence, seeks to enhance the regulatory environment and stability in the capital market, raise awareness levels for all participants dealing in the financial market and develop procedures to reduce risks associated with securities transactions.

The code of conduct is also aimed at developing tools to enhance the market participants’ confidence in accordance with best international practices and standards, which in turn supports the growth and prosperity of the market.

The provisions of the code of market conduct apply to any act, dealing, conduct or behavior by any means, including the use of technical tools to create and enter orders automatically or attempt to perform any of them with the intention of deceiving or misleading investors or manipulating the market without regard to the consequences of achieving profits, losses or damage to others.

The key elements of the code of market conduct for consultation are the clarification of prohibited behaviors that involve manipulation or deception or any actions or practices that may give or are likely to give a false or misleading impression of securities, as well as behaviors that constitute manipulation or misleading about the supply or demand of a security.

The misleading acts include promoting the purchase of a security for the purpose of selling it or enabling another person to sell it, or promoting the sale of a security for the purpose of buying or enabling another person to buy it, or buy or sale of securities at the market close for the purpose of misleading investors acting on the basis of closing prices, or entering buy or sell orders in a security order book for the purpose of creating a false impression of the volume of the order or supply, or entering orders or a series of orders in a security order book for the purpose of influencing on the share price in order to create an opportunity to sell or buy a security at a preferential price, or to enter an order or series of buy or sell orders on a security without having the intention to execute it.

The code of market conduct also includes the prohibition of behaviors that constitute manipulation or misinformation about the trading activity of a security, behaviors that constitute manipulation or misinformation about fixing or creating an artificial price, behaviors related to the dissemination of false or misleading information, and trading behaviors based on inside information.