1. Transactions that are executed, transferring expense and risk with full effect between independent parties, and correctly reported to the market, may be capable of giving false or misleading signals as to supply of, demand for or price of financial instruments, within the meaning of the first indent of Article 1(2)(a) of Directive 2003/6/EC. An assessment of whether market manipulation under the first indent of Article 1(2)(a) of Directive 2003/6/EC has occurred must be based on objective factors and consideration of the results of transactions and their effect. However, in examining whether a transaction conveys false or misleading signals, the real interest in buying and selling the security in question may support a finding of such objective factors.

2. It is not compatible with the second indent of Article 1(2)(a) of Directive 2003/6/EC for the determination of whether a price is at an “abnormal” or “artificial” level to be made on the basis of the individual prerequisites for the investor executing a transaction.

The determination of an “abnormal” or “artificial” price within the meaning of the second indent of Article 1(2)(a) of Directive 2003/6/EC may be established on the basis of an individual transaction. It is for the referring court to assess and determine which signals and factors are relevant for its assessment. Such factors may include comparisons with previously reported prices and changes in trading and market conditions, both in terms of the relevant market, the financial instrument and its issuer.

A price can be secured within the meaning of the second indent of Article 1(2)(a) of Directive 2003/6/EC in a transaction involving a security that is not traded in an auction mechanism, but that has come into being through direct negotiations between two of several brokerage houses. It is for the referring court to determine whether the price has been secured, taking into account factors such as the nature and type of the market in question, including the type and pricing of financial instrument traded on the market, whether the market and the relevant financial instrument is characterised by low liquidity in trading, as well as the information available to market participants, including the means by which information on trades is made available.

3. Reasons related to uncovering the market situation as to supply of, demand for, and price of a financial instrument, or taking advantage of other investors’ uncertainty in this regard, can, in principle, constitute legitimate reasons within the meaning of the second subparagraph of Article 1(2)(a) of Directive 2003/6/EC. This is provided that they are not contrary to the objectives of the Directive. This is for the national court to assess in light of the investor’s behaviour as a whole. It is also for the national court to assess whether an accepted market practice, applicable to the market and financial instrument in question, exists. Both the condition of a legitimate reason and the transaction’s conformity with an accepted ZBB 2021, 259market practice need to be fulfilled for an investor to benefit from the defence in the second subparagraph of Article 1(2)(a).

4. It is not compatible with Article 1(2)(c) of Directive 2003/6/EC to consider information to be disseminated where, in a situation such as that at issue in the main proceedings, an investor has given information regarding a potential transaction to a broker in order for it to be passed on to one or more other investors in the market, or the broker actually has passed on such information.