CME-3B Broker Regulations Complete Review Guide 2026–2027

4. Articles 5 and 6: insiders are not just issuer employees. The rules address family, business and contractual relationships and direct and indirect trading.
5. Articles 7–9: a statement may be oral or written; untruth may arise from omitting a material fact or circulating another person’s statement.
6. Article 10: separate liability conditions from what a claimant must establish, and distinguish an untrue statement from failure to make a required statement.
7. Manipulation is prohibited whether by trades or orders, and covers artificial prices in a related security.
8. Orders not intended to execute, creating fictitious buying interest, are specified conduct even if unexecuted.
9. Buying and selling between one's own accounts without change in beneficial ownership to fabricate activity is manipulation.
10. Matched orders: entering an order knowing of a matching one in size, timing and price to fabricate activity.
11. Promoting purchases to sell one's own or a partner's holding is specified conduct, and some accurate analysis does not cure it.
12. The market-maker and share buyback exceptions require compliance with the governing rules and procedures.
13. Inside information concerns a security or its orders, is non-public and would be expected to have a material effect on price or value if made public.
14. Information may concern orders yet to be entered, not just orders visible in the order book.
15. Insider trading covers selling and buying and indirect trading via an agent or attorney-in-fact.
16. An insider can be an employee, contractor or related person, and a non-insider who receives the information by any means is not exempt.
17. Article 6(b): it is enough that the trader knew or should have known the nature of the information.
18. An untrue statement includes omitting a required material fact and may be oral or written.
19. In an Article 10 claim the claimant must establish specific conditions such as materiality and lack of awareness of the untruth.
20. Not authoring a rumour does not exempt circulating it for a prohibited purpose.

Common mistakes in this chapter

• ✕ An unexecuted order can still be manipulative.
• ✕ Not authoring a rumour does not exempt its circulation for a prohibited purpose.
• ✕ Not being an issuer employee is no exemption from inside-information rules.
• ✕ Treating use of an algorithm as removing the prohibition; automated orders are covered.
• ✕ Classifying an instrument as a security without checking traded-security status and the information's effect.
• ✕ Thinking insider-trading rules cover buying only; selling and negative news are covered too.
• ✕ Confusing materiality with non-public status; each element has its own test.