marketconduct

Market conduct refers to the behavior of participants and the rules governing their conduct in financial markets to ensure integrity, fairness, transparency, and protection of investors. It covers the prohibition of market abuse, manipulation, misrepresentation, and conflicts of interest, as well as compliance with regulatory requirements.

The scope includes insider trading, front-running, spoofing, wash trading, layering, false or misleading statements, and other forms of market manipulation across asset classes such as equities, fixed income, derivatives, foreign exchange, commodities, and increasingly digital assets.

Regulators implement market conduct rules through securities and commodities laws, exchange and broker-dealer requirements, and supervisory regimes. Market surveillance systems monitor orders and trades, while disclosure, best execution, and fiduciary duties govern dealings with clients.

Enforcement measures include fines, disgorgement, license suspensions or revocation, and, in some jurisdictions, criminal penalties. Regulators may require restitution to harmed investors and impose ongoing oversight.

Compliance and governance: firms establish market conduct programs, codes of ethics, training, internal controls, post-trade surveillance, and whistleblower channels to detect and deter misconduct.

International context: principles from bodies such as IOSCO emphasize market integrity and investor protection, with cross-border cooperation and harmonization efforts. Emerging markets and digital assets raise new challenges for market-conduct regulation.