The Commission has published its proposals for revising the Market Abuse Directive (MAD). The proposals take the form of a Regulation. The current MAD would be repealed once the Regulation starts to apply, which is planned to be 24 months after its entry into force. The review is aimed at keeping pace with market developments, reinforcing regulatory powers and reducing administrative burdens on small and medium-sized (SME) issuers. The Regulation will:

  • bring within its scope financial instruments traded only on MTFs, OTFs and over the counter, so trading on all platforms and in all instruments that can have an impact on them is covered;
  • set out which elements of HFT will be considered as prohibited market manipulation;
  • extend the scope of the regime to prevent abuse occurring across commodity and related derivative markets;
  • create a new offence of attempted market manipulation, so regulators can sanction individuals who attempt market manipulation but fail;
  • make the reporting obligation wider, to include suspicions of unexecuted orders and suspicious OTC transactions;
  • give regulators greater investigative powers, and propose common principles for sanctions for market abuse; and
  • exempt issuers on SME markets from the need to draw up insider lists.

The Commission has also proposed criminal sanctions for market manipulation and insider dealing. These proposals take the form of a Directive, which would require Member States to enact laws criminalising the most serious market abuse offences and attempts to commit them, and to impose appropriate penalties.

The Commission has separately explained how it is bringing emission allowances within the scope of MiFID and MAD.

The proposal will now be discussed in the EP and Council. (Source: Press Release on MAD Review, Press Release on Market Abuse Criminal Sanctions, Proposed Market Abuse Regulation and FAQs on Emission Allowances)