This lesson examines regulation of market conduct, including market abuse, insider trading, and consumer protection. Conduct of business regulation is a distinct focus of modern financial regulation .

7.1 Market Abuse and Insider Trading
Market abuse regulation prohibits behaviour that distorts market integrity, including insider trading (trading on non-public information) and market manipulation (disseminating false information to influence prices) . Prohibitions on insider trading and market manipulation are fundamental to maintaining fair and orderly markets . Students analyse the implications of securities laws for the structure and operations of capital market participants . Regulatory enforcement includes fines, sanctions, and prohibition orders .

7.2 Consumer Protection and Product Governance
Consumer protection is a key regulatory objective . In Europe, MiFID II introduced product governance requirements for manufacturers and distributors of financial products, suitability and appropriateness assessments, and stricter rules on inducements . The UK’s FCA Consumer Duty (2023) added an obligation to monitor and demonstrate good client outcomes . Consumer protection aims to address information asymmetries and ensure fair treatment of retail investors .

7.3 Ethics and Governance
Ethics and governance are integral to financial regulation . Students must analyse the ethical, governance, and regulatory environment for funds of different structures and in different jurisdictions . The ethical dimension of regulation addresses conflicts of interest, fiduciary duties, and professional standards . Professional bodies, such as the CFA Institute, set standards of professional conduct that complement regulatory requirements .