What is market manipulation, and how is it detected and reported?

MAR bans market manipulation and any attempt at it. The core case is any transaction, order to trade or other behaviour that gives, or is likely to give, false or misleading signals about an instrument's supply, demand or price, or that fixes, or is likely to fix, its price at an artificial or abnormal level. The test is effects-based; within this definition the only escape is to show legitimate reasons and conformity with an accepted market practice. Separately, buy-back programmes and stabilisation that meet MAR's conditions are exempt, as are monetary and public-debt management by public bodies. The other forms are trades or behaviour using a fictitious device or other deception; spreading information by any means, including the internet, that gives false or misleading signals, rumours included, where the person knew or ought to have known it was false; and false or misleading inputs to a benchmark that the person knew or ought to have known were false, or anything else that manipulates its calculation.

MAR also names specific forms of manipulation. The first is securing, alone or jointly, a dominant position over supply or demand that has, or is likely to have, the effect of fixing prices or creating other unfair trading conditions. The second is buying or selling at the market's opening or close in a way that misleads, or is likely to mislead, investors who act on the displayed prices. The third is placing, cancelling or modifying orders by any means, including algorithmic and high-frequency trading, in a way that disrupts or delays the trading system, makes genuine orders harder to identify (for instance by overloading the order book) or sends false signals, such as starting or exaggerating a trend. The fourth is using occasional or regular access to the traditional or electronic media, social media included, to voice an opinion on an instrument after taking a position in it, and then profiting, without properly disclosing that conflict. The fifth is trading emission allowances on the secondary market before an auction with the effect of fixing an abnormal or artificial clearing price, or of misleading bidders.

MAR lists indicators that are not proof in themselves, such as trades forming a large share of daily volume that move the price, trades with no change in beneficial ownership, orders withdrawn before execution after changing the visible best prices, and activity when reference prices are set. Delegated Regulation (EU) 2016/522 adds practices such as ping orders, quote stuffing, momentum ignition, layering and spoofing, and marking the close (see How is a regulated market authorised and supervised, and when must it alert CySEC?). Since 5 August 2026 the indicators and these practices may be assessed over periods longer or shorter than a day or a trading session.

Operators of trading venues, whether market operators or investment firms, must have effective systems, procedures and arrangements designed to prevent and detect insider dealing, manipulation and attempts at either, and must report suspicious orders and transactions, including cancellations and modifications, without delay to the regulator responsible for the venue. Anyone who arranges or executes transactions professionally, such as a CIF dealing for clients, must likewise have effective arrangements to spot and report suspicious orders and trades, whether placed or executed on a venue or off it.

On forming a reasonable suspicion, the firm sends a suspicious transaction and order report (STOR) without delay to the competent authority of the Member State where it is registered or has its head office or, for a branch, where the branch is: for Cyprus firms, CySEC, using the EU template. That authority passes it immediately to the authorities of the trading venues concerned. Under Delegated Regulation (EU) 2016/957 the firm must not tip off the person reported and keeps records of its analysis for five years. Reporting is 'without delay'; only forwarding between authorities is 'immediate'.

An accepted market practice (AMP) is a practice that a national regulator has formally accepted. It is a defence only against the first form of manipulation, and only for trading done for legitimate reasons. The regulator weighs whether the practice is highly transparent; strongly safeguards market forces and the interplay of supply and demand; improves liquidity and efficiency; suits the trading mechanism and lets participants react properly and in time; and avoids risks to related markets, regulated or not. It also weighs the results of any investigation of the practice, in particular whether it broke market abuse rules or codes of conduct, and the market's structure, including retail participation. There is no volume test, and an AMP applies only in markets whose regulator has accepted it.

The regulator notifies ESMA and the other national regulators at least three months before the practice is meant to take effect. ESMA gives a published opinion within two months; a regulator that goes ahead against it must publish its reasons within 24 hours. Each AMP is reviewed regularly and at least every two years, and the result is reported to ESMA even if the practice stays unchanged.