Study fraud and market abuse for CISI Combating Financial Crime, with a UK-specific reading frame built around the official chapter structure and exam weighting.
This chapter combines two areas that both depend heavily on dishonesty, information misuse, or unfair dealing. The exam expects candidates to distinguish fraud concepts from market-abuse behaviour while recognising that both can damage customers, markets, firms, and control frameworks. The strongest answers identify the core conduct first and then connect it to the right legal or surveillance response.
| Check | What matters |
|---|---|
| Official topic weighting | 4% |
| Core distinction under pressure | separate dishonesty against a victim from abuse of market integrity or inside information, and then select the right control response. |
| Strongest use of this page | use it to stop fraud and market-abuse questions collapsing into one general “bad conduct” answer |
| UK note | Keep the UK frame active: Fraud Act 2006, insider dealing, market-abuse controls, surveillance, FCA market-integrity expectations, and GBP when a monetary example helps. |
The paper usually tests whether you can identify what is being abused. Fraud normally centres on deception, false representation, abuse of position, or dishonest gain or loss. Market abuse normally centres on misuse of inside information, manipulation, or conduct that undermines fair and orderly markets.
It also tests whether you understand that firms need prevention and detection systems. Surveillance, escalation, staff training, control of inside information, and challenge around unusual behaviour all matter.
| Section | Main exam angle |
|---|---|
| Fraud concepts and the UK Fraud Act 2006 | If the stem is about deception or dishonest gain, Fraud Act thinking is likely central |
| Types of fraud | If several fraud patterns look similar, classify the core mechanism of the dishonest conduct |
| Market abuse and insider dealing | If the problem is information misuse or manipulative trading behaviour, switch into market-integrity logic |
| Sarbanes-Oxley Act 2002 | If governance and anti-fraud corporate-control comparisons appear, keep the comparison broad and cross-border |
Fraud questions normally revolve around deception, dishonest intent, or abuse of position. The exam may use customer transactions, internal misconduct, false statements, or document manipulation to test whether the candidate can spot the dishonest mechanism.
The strongest answer usually starts by asking who is being misled, how the gain or loss arises, and what internal control should have challenged the conduct earlier.
The syllabus expects broad familiarity with different fraud patterns rather than forensic detail. Identity misuse, mandate fraud, internal fraud, false invoices, diversion of funds, misrepresentation, and abuse of systems are all common examples.
A practical answer usually identifies the fraud type and then moves to the preventive or detective control, such as segregation, verification, call-back procedures, transaction monitoring, or escalation.
Market abuse questions are about fair dealing, proper use of information, and protection of market integrity. If a person uses non-public price-sensitive information or manipulates transactions or prices, the correct lens is no longer general fraud but market-abuse control.
The paper often rewards candidates who distinguish suspicious trading from proven inside dealing. Firms still need surveillance, restricted lists, wall-crossing discipline, and escalation even before definitive proof is available.
The exam uses Sarbanes-Oxley for high-level comparison around governance and anti-fraud corporate controls. The candidate does not need to turn the answer into a US law seminar. The point is to recognise that control expectations can have cross-border relevance in listed or international environments.
An employee learns non-public information about an impending takeover and tells a relative, who buys shares before the announcement. Which is the strongest starting classification?
Answer: B.
The use of non-public price-sensitive information for trading points directly toward insider-dealing and market-abuse concerns rather than general operational error or unrelated crime categories.