An Analysis of Market Manipulation under the Securities Services Act 36 of 2004 (Part 2)’

Abstract

This article analyses the offences comprising disclosure-based market manipulation in South Africa under the Securities Services Act 36 of 2004. Disclosure-based market manipulation entails the dissemination of inaccurate information relating to the demand, supply, price or value of a security. The defences to market manipulation are also examined, as well as the penalties for committing the offence of market manipulation. This article argues that while the statutory provisions regulation market manipulation are commendably internationally competitive a potential weakness off South African’s market manipulation regime is the paucity of defences to market manipulation, which could easily discourage legitimate trading. A further more serious weakness is the absence of a statutory civil remedy for market manipulation, which could have the effect of not effectively deterring persons from engaging in market manipulation and of denying victims of market manipulation the opportunity to recover their losses.