FCA is consulting on the changes it will need to make to its Handbook to support the implementation of the new market abuse regime under the Market Abuse Regulation (EU MAR). UK primary legislation and FCA’s rules will need to change, so they are not incompatible with EU MAR. Treasury will make secondary legislation amending the Financial Services and Markets Act 2000 (FSMA), and FCA’s consultation assumes certain changes to FSMA will take effect. The key parts of FCA’s consultation are:

  • to seek views on aspects of EU MAR where Member States have implementation options, specifically:
    • whether to require firms systematically to provide an explanation whenever they disclose a delay in disclosure of inside information. FCA proposes that firms should provide an explanation only if FCA asks them to do so, but seeks views on how burdensome it would be to provide explanations in all cases, and on how many notifications firms would expect to make each year;
    • what threshold to apply for the disclosure of managers’ transactions. EU MAR sets a €5,000 threshold but Member States may increase this to €20,000 if justified and ESMA agrees. FCA currently applies no threshold under the Disclosure and Transparency Rules (DTR) and proposes to adopt the €5,000 threshold, but seeks data on how many transactions would be notifiable under either the €5,000 or €20,000 threshold;
  • its general approach to changing the Handbook, which ranges from removing provisions where there is an equivalent in EU MAR, through amending and conforming existing provisions to make them consistent with EU MAR, to leaving unchanged provisions that are relevant and not addressed by EU MAR;
  • how it proposes to amend its Market Conduct Sourcebook (MAR): FCA understands Treasury will remove the requirements in FSMA for FCA to make the Code of Market Conduct (CoMC). However, it understands many people find the CoMC useful so would propose to keep as much of the content as remains relevant, but no longer describe it as a Code. The consultation includes detail on FCA’s proposed action in relation to chapters 1, 2 and 8 of MAR;
  • how it proposes to amend relevant parts of the Conduct of Business Sourcebook and the Supervision Manual;
  • how it proposes to amend the DTR, Listing Rules and Model Code. FCA proposes to replace the current provisions of the Model Code with rules and guidance on systems and procedures for companies to have clearance procedures for managers’ transactions.

FCA asks for comment by 4 February 2016, and EU MAR takes effect on 3 July 2016. (Source: FCA Consults on MAR)