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Subject 6. Standard II (B) Market Manipulation PDF Download
II. INTEGRITY OF CAPITAL MARKETS
B. Market Manipulation.
Members and Candidates must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.
Market manipulation is a deliberate attempt to interfere with the free and fair operation of the market. It includes practices that distort security prices or trading volume with the intent to deceive people or entities that rely on information in the market.
Market manipulation examples include:
The intent of the action is critical to determining whether it is a violation of this standard. The standard does not prohibit legitimate trading strategies that exploit a difference in market power, information, or other market inefficiencies. It also does not prohibit transactions done for tax purposes (e.g., selling and immediately buying back a particular stock).
User Contributed Comments 9
|Presenting false and misleading information is a violation of I(C) also.
|How can ramping , capping & pegging be differentiated from legitimate trading?
|that's too technical, 81618, and won't be in the exam.
|False and Misleading Info. Violation of I(C), but this the company re-releasing or hyping information, not a member of the CFA. Just a point of interest in the case.
|to addidas- I think the last paragraph explains and provides an answer to your question. Its all about the intent of the trader.
|to sumerdumer: only a CFA candidate/member can violate a CFA standard, thus when a questions asks if an action violates a CFA standard, the implicit assumption exists that the party involved is a CFA candidate/member
|unload the dump
|Pegging has a different meaning nowadays according to urban dictionary...
|Melon Usk, CFA level I candidate can be considered as a public figure. Recently, he tweeted "ya all should buy Dogecoin rn". Did he violate Standard II (B)?
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
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