ESMA’s Report on the Market Abuse Regulation

On the 24th September 2020 the European Securities and Markets Authority (“ESMA”) published a report containing its review on the appropriateness of the Market Abuse Regulation (“MAR”). The report has concluded that, in general the MAR has provided satisfactory results in preventing market abuse since its inception in 2016.

Additionally, ESMA also set outs a number of recommendations targeting specific areas requiring clarifications, including:

  • Market soundings – clarification required that the MAR requirements represent an obligation for disclosing market participants that, if complied with, will protect them from the allegation of having unlawfully disclosed inside information;
  • Benchmark provisions and the interaction between MAR and collective investment schemes – clarification required for the responsibility of management companies in relation to the disclosure of inside information; and
  • Withholding tax reclaim schemes: removing the current limitations on national competent authorities to exchange information with relevant tax authorities.

Furthermore, the report also points at particular areas which require additional guidance including such as inside information and disclosure. In this regard, ESMA will issue further guidance in relation to the application of the inside information definition and for the particular scenarios concerning delayed disclosure. Pre-hedging may also be assessed in the future where specific factors such as its relevance for illiquid instruments or the consequences of pre-hedging activities on the markets.

The report also focuses on the following:

  • Buy-back programmes;
  • Insider lists;
  • Managers’ transactions;
  • Establishment of an EU framework for cross-market order book surveillance;
  • Appropriateness of introducing common rules on the need for all Member States to provide administrative sanctions for insider dealing and market manipulation;
  • Cross border enforcement of sanctions; and
  • Retention period of personal data.

Feel free to contact us should you require any assistance on the Market Abuse Regulation.