The European Commission has made a formal request to the European Securities and Markets Authority (ESMA) for technical advice on the report to be submitted by the Commission to the European Parliament and to the Council under article 38 of the Market Abuse Regulation (Regulation (EU) No 596/2014) (‘MAR’).

Specifically, the Commission has asked ESMA to provide advice on:

  • the appropriateness of introducing common rules on the need for all Member States to provide for administrative sanctions for insider dealing and market manipulation;
  • whether the definition of inside information is sufficient to cover all information relevant for competent authorities to effectively combat market abuse;
  • the appropriateness of the conditions under which the prohibition on trading is mandated in accordance with article 19(11) with a view to identifying whether there are any further circumstances under which the prohibition should apply;
  • the possibility of establishing an EU wide framework for cross-market order book surveillance in relation to market abuse, including recommendations for such a framework; and
  • the scope of application of the benchmark provisions.

In addition, the Commission has also asked ESMA for advice on:

  • whether spot FX contracts should be covered by MAR;
  • the scope of reporting obligations under the exemption for buyback programmes;
  • the effectiveness of the mechanism to delay disclosure of inside information;
  • the usefulness of insider lists drawn up by issuers and persons acting on their behalf or on their account pursuant to Article 18 in investigating market abuse;
  • the adequacy of the requirement to notify managers’ transactions as applied to collective investment undertakings;
  • the appropriateness of certain aspects of the requirement to notify managers’ transactions; and
  • cross-border enforcement of sanctions.

ESMA has been asked to provide its contributions by no later than 31 December 2019.

It will be interesting to keep an eye on any developments to assess whether the advice will lead to a drastic overhaul of MAR, or whether it will serve to implement only technical and cosmetic changes.

We will be sure to keep clients abreast of any developments.

The formal request letter can be accessed here.