223.This section sets out the behaviour which constitutes market abuse.  It also confers on the Treasury an order-making power to specify which markets and which investments come within the scope of this section.
224.Subsections (1) and (2) set out the conditions which must be satisfied before behaviour can be regarded as market abuse (and a penalty possibly imposed or statement published). In order to be abuse the behaviour must:
	take place in relation to qualifying investments traded on a market to which the section applies;
	be behaviour of a particular kind, as set out in subsection (2); and
	be behaviour which is likely to be regarded by a regular user of the market as a failure on the part of the person (A) engaged in the behaviour to observe the standards which the regular user would reasonably expect of a person in A’s position. The regular user of the market is defined in subsection (10) to be a reasonable person who regularly deals on the market. He is intended to represent the distillation of the standards expected by those who regularly use the market.
225.There are three kinds of behaviour set out in subsection (2).  Broadly speaking, these are that the behaviour is based on information not generally available to the rest of the market; that the behaviour is likely to give the regular market user a false or misleading impression; or that the regular user would be likely to regard the behaviour as behaviour which would distort the market.
226.Subsection (6)(a) brings behaviour which takes place in relation to the subject matter of investments within the definition of behaviour which can be caught by these provisions.  This means that, for example, behaviour in relation to a precious metal which affects the price of a futures contract in the metal can potentially be caught by these provisions if it is behaviour which falls within all of the tests set out above.  Subsection (6)(b) also brings investments within the regime which are not themselves qualifying investments for the purposes of this section, but which are derivatives of a qualifying investment (for example options on options); or whose price or value is expressed by reference to the price or value of qualifying investments, for example spread bets.  Subsection (8) allows the Authority to provide that behaviour conforming with a particular rule or rules does not amount to market abuse.
Commentary on Sections Part Viii: Penalties for Market Abuse Section 118: Market abuse