European Securities and Markets Authority Publishes Final Report on Suspicious Transaction Reporting Under the Market Abuse Regulation
12/12/2019The European Securities and Markets Authority has published its final report on the compliance of Member States with suspicious transaction and order reports under the Market Abuse Regulation, in which it sets out the results of its peer review into certain aspects of the STOR framework. Experts from national regulators and ESMA were appointed to conduct the review and issued a self-assessment questionnaire to all 31 EEA national regulators, as well as conducting on-site visits to six national regulators. The purpose of the review was to assess the following six aspects of the STOR framework and allocate an assessment of the compliance of each national regulator:
- Supervision of market operators and investment firms that operate trading venues’ systems and arrangements to detect suspicious activity and report STORs - 22 national regulators were deemed fully or broadly compliant, including the U.K.;
- Supervision of those who professionally arrange or execute transactions in relation to their systems and arrangements for detecting suspicious activity reporting and reporting STORs – 20 national regulators were deemed fully or broadly compliant, with three (Cyprus, Romania and Norway) being assessed as non-compliant;
- Responses to poor quality and non-reporting of STORs and their related enforcement and sanctions activity – 18 national regulators were deemed fully or broadly compliant, while Cyprus and Lichtenstein were non-compliant;
- Analysis of STORs, including some observations on the outcomes of STORs – all national regulators were fully or broadly compliant;
- Cross-border exchange of STORs by national regulators – all national regulators other than Cyprus were deemed to be fully or broadly compliant, while Cyprus was assessed as partially compliant; and
- Resources for supervision of the STOR framework – 27 national regulators were fully or broadly compliant, while Estonia was non-compliant.
Following the review, ESMA has also issued four key recommendations to national regulators: (i) they should ensure all individuals who are required to submit STORs under MAR are engaged in the STOR framework; (ii) they should challenge the suspected non-reporting of STORs; (iii) they should bear in mind the full strength of their regulatory toolkit when supervising the STOR framework and escalate their supervisory response where appropriate; and (iv) they should ensure they have appropriate IT tools to maximize the usefulness of regulatory data in their supervision of the STOR framework.
View ESMA's report on suspicious transaction reporting.
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