Market Abuse Regulation

ESMA Securities and Markets Stakeholder Group Responds to ESMA Consultations on Draft Technical Standards and Technical Advice on the Market Abuse Regulation

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On October 13, the Securities and Markets Stakeholder Group (SMSG) of the European Securities and Markets Authority (ESMA)published its response to the July consultations published by ESMA on draft technical standards and draft regulatory standards (RTS),implementing technical standards (ITS) on the Market Abuse Regulation (Regulation 596/2014) (MAR) and draft technical advice on possible delegated acts concerning MAR.

SMSG has provided, in its response, advice to ESMA on the nine topics covered in the ESMA consultations including identifying key issues in respect of market soundings, insider lists, investment recommendations and manager transactions. The SMSG also sets out general comments on ESMA’s approach to building a single rulebook on market abuse.

The closing date for responses on the ESMA consultations was October 15.  SMSG Response.

Legislative Resolution on the Market Abuse Regulation Adopted at First Reading by European Parliament

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In a press release published on September 10, the European Parliament announced that it had adopted a legislative resolution on the Market Abuse Regulation (MAR) in a plenary session.  The legislative resolution will establish tougher rules to strengthen prevention and punishment of market abuse.

The leading MEP on the legislation, Arlene McCarthy, said “we are sending a clear signal that the EU is not a soft option or safe haven for perpetrators of market abuse.”

The legislation introduced:

  • Tougher sanctions: Individuals convicted of market abuse will face fines of up to €5 million and a temporary or even permanent ban on undertaking certain roles within investment firms, while offending companies could be fined up to 15% of their annual turnover or €15 million.
  • Wider scope: A range of financial instruments, including commodity derivatives affecting food and energy prices, traded inside and outside the exchanges, will now be covered.

The European Parliament is due to start negotiations with EU member states on the criminal sanctions for market abuse (directive) in October.  Press Release.