05 May 2016
The Market Abuse Regulation (MAR) enters directly into force on 3 July 2016, replacing and repealing the existing framework under the Market Abuse Directive (MAD). The new MAR regime aims to introduce a single market abuse rulebook across EU member states, allowing less scope for national discretion than under the existing MAD rules. The new framework seeks to enhance confidence in the integrity of European markets and in so doing it is hoped will reduce regulatory and administrative costs, especially for firms operating on a cross-border basis.
The key changes to be introduced by MAR include:
Furthermore, the Directive for Criminal Sanctions for Insider Dealing and Market Manipulation (CSMAD) also becomes effective on 3 July 2016. CSMAD is designed to complement and ensure the effective implementation of MAR, by giving competent authorities increased investigative and sanctioning powers − including the imposition of criminal sanctions.
Once adopted by the European Commission, ESMA’s technical advice and standards will set out much of the detail of the new MAR regime. Such advice and standards should assist companies in preparing for their obligations under MAR, particularly in relation to amending internal policies, maintaining insider lists, preparing its share dealing code, and updating training practices.