ESMA discuss guidelines under Market Abuse Directive (MAR)

Members of the Market Integrity Office at the European Securities and Markets Authority (ESMA) discussed the draft Market Abuse Regulation guidelines with industry actors.

09 Oct 2014

Please note that this does not constitute a formal record of the proceedings of the meeting. It is dependent on interpretation and acts as an unofficial summary of the debate.

On October 8, the European Securities and Markets Authority hosted an open hearing on the consultation papers on technical advice and technical standards under the Market Abuse Regulation (MAR). All relevant guidelines and draft regulatory technical standards required under MAR are to be submitted by ESMA to the Commission by 3 July 2015. MAR enters into force on the twentieth day following its publication in the Official Journal of the European Union (i.e. 2 July 2014) and shall apply from 3 July 2016. All member states must therefore have taken all necessary measures to ensure that their national laws comply with MAR by that date.

The panellists included Michele Mazzoni and Christophe Polisett, members of the ESMA Market Integrity Team, Nicoletta Giusto (NP) coordinator of the working group drafting technical standards on MAR and Konstantinos Botopoulos, Chairman of the Greek Capital Markets Mission and the Market Integrity Standing Committee.

Welcoming remarks

Kostas Botopoulos opened the session, explaining that he was Chairman of the Greek Capital Markets Mission and the Market Integrity Standing Committee dealing with market abuse legislation. He said that the most salient issues had been chosen for discussion, beginning with technical decisions and then advice. There is a final round for written stakeholder remarks before the consultation process closes completely.

Christophe Polisset explained how the ESMA consultation has been conducted and what it will be used for. He said that the work started in November 2012 on MAR – before it was formally announced – and a discussion paper put out late last year. There was an early hearing in January 2014. There has been a preparation of consultation papers; one on technical standards and one on technical advice. Technical Standards represent an empowerment to ESMA whereas Technical Advice output results from a Commission mandate asking ESMA to advise them on how to create implementing regulations. The consultation on Technical Standards has a legal draft text whereas the Technical Advice only has this to a lesser extent. The public consultation period is nearing its end and will close on October 15. Written responses have been asked for. The purpose of the opening hearing is to obtain clarifications on the consultation.

Kostas Botopoulos gave his views on the MAD/MAR regulation. The Regulation was published in the OJ in June 2014. There is a Regulation and a Directive which carries with it criminal sanctions. The market abuse field is moving towards criminal penalties. It will enter into force immediately in July 2016 without the need for National Parliament transcription. This is important to ensure technical details are not altered. The Level 2 text being drawn up by ESMA is very important.

MAR broadens the scope of MAD. It creates a separate category to deal with the SME market. Market soundings have been explored as have whistle-blower elements.

There are 15 technical standards to be drawn up by ESMA, and six areas where advice is to be given. Technical Standards are the most important because they can be adopted or rejected in full by the Commission.

Technical Advice issues are being drawn up for the sake of the Commission and as a legal paper. Managers transactions fall under technical advice as do the events triggering closed period exemption. Minimum thresholds for markets allowance will be discussed. The competent authority for the disclosure of information is to also be discussed.

Nicoletta Giusto said that in general, the topics below are to be discussed because they are new or novel, and will be the most likely to raise comments. If there are general comments on the Technical Standards then they would also welcomed.

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