Sections 1041A and 1041B of the Corporations Act focus on effect or likely effect rather than dominant purpose; in a multi-dimensional construct where trading in one market is used to influence a benchmark rate that in turn affects pricing in separate derivative markets, establishing dominant manipulative purpose for the trading does not of itself establish the requisite effect or likely effect of creating an artificial price or false or misleading appearance in the derivative markets. DPP v JM is confined to single-dimension cases where the product traded, the purpose for trading and the effect of trading are all in the same dimension. However, trading with a dominant purpose of influencing a benchmark rate, coupled with non-disclosure to counterparties, may constitute unconscionable conduct under s 12CC of the ASIC Act. Financial services licensees with specific knowledge of market susceptibility to manipulation must implement compliance procedures and training even where general industry awareness is lacking.
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