EU Opinion on Italian Accepted Market Practice in Accordance with the Market Abuse Regulation

The European Securities and Markets Authority has published an opinion supporting the Italian Commissione Nazionale per le Società e la Borsa’s (Consob) revised accepted market practice on liquidity contracts for the purposes of the Market Abuse Regulation. The Market Abuse Regulation provides certain prohibitions against market manipulation but allows “accepted market practices” (AMPs) as a defense against allegations of market manipulation. To benefit from the defense, it is necessary to establish that a relevant transaction was conducted for legitimate reasons and in accordance with a formally accepted AMP. AMPs must be established by national regulators and notified to ESMA. ESMA will then issue an opinion on the compatibility of the AMP with MAR and whether its establishment would threaten market confidence.

Consob notified ESMA of its intention to establish an AMP relating to liquidity contracts in April 2019, to replace the existing AMP on Liquidity Enhancement Agreements published under the previous Market Abuse Directive. ESMA considered Consob’s proposed MAR AMP and has concluded that it is compatible with MAR and contains mechanisms to limit threats to market confidence, including Consob’s commitment to enhanced supervision of the relevant liquidity contracts. ESMA published an annual report on the application of established AMPs under MAR in its 2019 annual report.

View ESMA's opinion on Consob's AMP.

View details of ESMA's 2019 annual report.

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