24Jun

The European Union (EU)’s Market Abuse Regulation (MAR) comes into force in the UK on July 3 2016. The result of last Thursday’s referendum will not affect its implementation in any way.

MAR is designed to deliver increased levels of investor protection and to increase market integrity.

Trading in all of the following is covered by the terms of the Regulation:

• Financial instruments that trade on a regulated market, or where a request has been made to allow them to trade on a regulated market
• Financial instruments that trade on a multilateral trading facility (MTF), or where a request has been made to allow them to trade on an MTF
• Financial instruments that trade on an organised trading facility (OTF)
• Other financial instruments whose price or value is dependent on, or could affect, the price or value of another instrument which trades on a regulated market, an MTF or an OTF. Examples here would include credit default swaps and contracts for difference
• Emission allowance market participants
• Certain spot commodities

Some of the key changes that MAR will bring about include:

• The definition of inside information will be widened to include information about emission allowances and spot commodities
• The definition of insider dealing will encompass the use of inside information to amend or cancel an existing order
• It will be illegal to persuade another party to enter into a transaction on the basis of inside information
• Attempts at market manipulation will be treated in the same way as actual market manipulation
• Issuers of financial instruments must maintain a list of which of their employees have access to inside information
• Inside information must be disclosed as soon as possible. Public disclosure of information can only be delayed if all of the following conditions are met: immediate disclosure would prejudice the issuer’s interests, the delay would be unlikely to mislead the public, and the issuer can ensure the information remains confidential. Once the information has been made public, the issuer must notify the UK’s MAR ‘designated competent authority’ of the delay, and if requested, should then provide a written explanation of the delay. The designated competent authority is the Financial Conduct Authority. Firms must keep records of the time and date the decision was made, the persons responsible for making the decision to delay and evidence of the circumstances that permit the delay under the MAR
• ‘Persons discharging managerial responsibilities’ must notify both the issuer of the financial instrument and the FCA of transactions conducted on their own account of more than EUR 5,000 in value. The notifications must be made within three business days after the date of the transaction.

The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.