European Commission Seeks Advice from European Securities and Markets Authority on Review of the Market Abuse Regulation
05/15/2019The European Commission has issued a formal request for advice to the European Securities and Markets Authority on the appropriateness of certain provisions under the Market Abuse Regulation. The Commission will use ESMA's feedback to inform a report it is mandated to submit to the European Parliament and Council by July 3, 2019. The Commission will also consider proposing further legislative amendments beyond the provisions it is mandated to review and has included these in its formal request for ESMA's advice. The Commission has requested ESMA to submit its contribution by December 31, 2019 to allow time for adoption of the report by the relevant institutions.
MAR aims to preserve the integrity of the European financial markets and provide more legal certainty for market participants. It focusses in particular on behaviors such as insider dealing, disclosure of inside information and market manipulation. Under MAR, the Commission's report must assess whether: (i) common rules requiring all Member States to impose administrative sanctions for insider dealing and market manipulation are appropriate; (ii) the definition of inside information is sufficient for authorities to effectively combat market abuse; (iii) the regime established under MAR to prohibit trading of securities by certain individuals within an organization should be extended to further circumstances; (iv) a cross-market order book surveillance system should be implemented across the Union to monitor market abuse; and (v) the scope of the application of the benchmark provisions under MAR is appropriate. The report should also consider whether the thresholds set for managers' transactions are appropriate.
There is scope within MAR for the Commission to consider further legislative amendments, which it has elected to do. In particular, the Commission has requested ESMA's input on issues such as whether: (i) spot FX contracts should be covered by MAR; (ii) the reporting obligations which entitle issuers of buyback programs to be exempted from MAR requirements are excessively burdensome and can be amended; (iii) the circumstances in which an issuer may delay disclosure of inside information are appropriate; (iv) insider lists produced by issuers in response to market abuse investigations are useful and relied upon by national authorities; (v) the obligation to notify managers' transactions in securities should be expanded to explicitly cover certain managers who may fall through the net under the existing wording of the legislation (including managers in external management companies managing investment funds); (vi) the thresholds and ongoing reporting obligations for managers to notify transactions in securities are appropriate or represent a compliance burden; and (vii) cross-border enforcement of sanctions are effective.
View the European Commission's request to ESMA.
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