On June 10, 2016, a Commission Delegated Regulation supplementing the Market Abuse Regulation was published in the Official Journal of the European Union. The Regulation lays down RTS on the criteria, procedures and requirements for regulators when establishing an accepted market practice and the requirements for maintaining it, terminating it or modifying the conditions for its acceptance. The RTS are made pursuant to MAR, which exempted the application of the prohibition of market manipulation to certain activities, provided that, amongst other things, the person's behavior confirms with an accepted market practice established by a regulator, in compliance with RTS.
The RTS require that, prior to establishing an accepted market practice, regulators must evaluate the market practice against the criteria set out in the MAR. Regulators must also consult as appropriate with relevant bodies, such as issuers, investment firms, credit institutions, investors and market operators. Regulators must also consider whether certain criteria are met when determining accepted market practices including criteria with respect to transparency, safeguards on the operations of market forces and interplay of the forces of supply and demand, impact on market liquidity and efficiency, impact on the proper functioning of the market, risks for the integrity of related markets, investigation of market practices and structural characteristics of the market. Regulators must notify ESMA of their intention to determine a market practice as an accepted market practice in the form annexed to the RTS. Additionally, the RTS set out when regulators should review an established accepted market practice and the criteria for modifying or terminating an established accepted market practice.
The RTS entered into force on June 11, 2016.