EU Report on Accepted Market Practices in Accordance with the Market Abuse Regulation

The European Securities and Markets Authority has published its annual report to the European Commission on the application of accepted market practices under the EU Market Abuse Regulation. The Market Abuse Regulation provides certain prohibitions against market manipulation. Accepted market practices, which are established by national regulators and notified to ESMA, provide a defense against any allegations of market manipulation. In particular, a dealing on a financial market which was carried out for legitimate reasons and in line with an established AMP, will not be found to constitute market manipulation. In the report, ESMA identifies AMPs which were established before the Market Abuse Regulation came into force, or which became effective after that date. The following AMPs have been established by national regulators:

1. The Spanish Comisión Nacional del Mercado de Valores (CNMV) AMP on liquidity contracts, revising the original AMP established under the Market Abuse Directive. ESMA approved the AMP on the basis that it includes mechanisms to limit the threat to market confidence.
2. The Portuguese Comissão do mercado de valores mobiliários (CMVM) AMP on liquidity contracts, which substantially revises the old AMP under MAD. ESMA approved the AMP because it includes mechanisms to limit the threat to market confidence and to reduce the risks of market manipulation.
3. The French Autorité des marchés financiers (AMF) has established an AMP on liquidity contracts for shares. The AMP came into effect on January 1, 2019, replacing the old AMP on liquidity contracts (no approved by ESMA), which remained in force until December 31, 2018. ESMA has not approved the AMP on liquidity contracts for shares and notes, in the report, that the AMP differs from the ESMA Points of Convergence for AMPs in respect of price, volume, transparency and resources. The AMF intends to continue with the AMP for a period of two years because it has been in existence in France for about thirty years and concerns around 440 contracts. The AMF will assess the impact of the AMP against ESMA's Points of Convergence using data from the two-year period.
4. The Italian Commissione Nazionale per le Società e la Borsa (CONSOB) has notified ESMA of three AMPs that it had established under MAD and that it intended to revise, namely the AMP on liquidity contracts (CONSOB AMP No 1), the AMP on purchase of own shares to set up a shares warehouse position (CONSOB AMP No 2) and an AMP on buyback of bonds issued at predetermined conditions (CONSOB AMP No 3). CONSOB has not yet notified ESMA, for the purposes of MAR, of the amended AMPs and the three AMPs are still being applied.

View ESMA's report.

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