The incoming Market Abuse Regulation (MAR)

Transcription

1 The incoming Market Abuse Regulation (MAR) Helen Boyd Trading Conduct & Settlement Policy Team, Markets Policy 1

2 Agenda Introduction Current status and timetable of the legislation Key differences between MAD and new MAR Overview of the new requirements FCA expectations including Handbook changes Next steps for industry Q&A 2

3 Introduction Why MAR? The current UK market abuse regime is based on the European Market Abuse Directive MiFID Technical developments and evolving behaviour Differences of implementation in some Member States MAR A single European rulebook 3

4 Current status and timetable of MAR June 2014: MAR published in the Official Journal of the EU Feb 2015: ESMA submitted Technical Advice Sept 2015: ESMA submitted Technical Standards Now: Adoption of the Level 2 amendments/rejection possible. Final adoption Q1 2016? L3 Guidelines being worked on November 5: FCA consultation published (closes Feb 4) 3 July 2016: MAR will apply as law dependency on MiFID2 4

5 Key differences between MAD and MAR Expanded Scope New Offences Benchmark manipulation Attempts New regime for Soundings STORs Insider lists 5

6 Overview of the new regime General provisions Scope Exemptions for buy-backs and stabilisation Exemptions for certain public bodies Offences Insider dealing Legitimate behaviour Unlawful disclosure of inside information Soundings Market Manipulation AMPs Prevention and detection: STORs 6

7 Overview of the new regime Disclosure requirements Public disclosure of inside information Insider lists Managers transactions Investment recommendations ESMA and competent authorities Powers for NCAs Cooperation arrangements Administration and sanctions Sanctions and publication of decisions Whistleblowing 7

8 What do you need to do to be ready? Keep in touch with the European developments Assess current processes, systems and arrangements and their governance Plan Budget Set up working groups 8

9 9 Questions...?

10 MAR policy: Monica Rodriguez-Sanchez Amy Smith Marianne Webber Helen Boyd Manager, Trading Conduct and Settlement Policy Team

11 Market Conduct Rob Moulton Richard Brearley - Macquarie AUSTRALIA BELGIUM CHINA FRANCE GERMANY HONG KONG SAR INDONESIA (ASSOCIATED OFFICE) ITALY JAPAN PAPUA NEW GUINEA SAUDI ARABIA (ASSOCIATED OFFICE) SINGAPORE SPAIN SWEDEN UNITED ARAB EMIRATES UNITED KINGDOM UNITED STATES OF AMERICA

12 Background Legislative, regulatory and court case driver change Inside information Conduct cases UK / Europe Record keeping and definitional changes MAR Market manipulation No court cases Scope widened - MAR

13 Legislative changes in the UK Removal of the RINGA offence largely overlapped with the "insider dealing" offence Sunset clause on market distortion largely overlaps with false or misleading impressions Overall impact? little change to the scope in the UK general principle 5 observe proper standards of market conduct has always been the outer boundary of accepted UK conduct in any event

14 Changes to the legislation in Europe MAR II no real change on the core offences lots of new guidance on when they might be committed some of which is pretty absurd dependent on sensible interpretation by Competent Authorities Key changes are to process and procedure market soundings wall crossings insider lists "scripts" Key burden falls on control room and monitoring environment, rather than front office

15 Changes in the courts in the UK Hannam the 5% "reasonably likely" test comments on "the company had not announce it so it cannot be inside" point repetition of information formality of wall crossings Einhorn/Greenlight cleansing statements

16 Changes in the courts in Europe Daimler relevance of protracted steps irrelevance of formal approvals complexities for changes in senior management Jean-Bernard Lafonta v Autorité des marchés financiers (Case C-628/13) no need to know "which way" a market might move

17 Impact on practitioners Market soundings Importance of records and the control room environment The double whammy Hannam tells us more information is inside than we thought MAR tells us to keep more information than we used to Overriding concerns in equity markets driven not by tinkering on the scope conduct risk market abuse controls and monitoring Proper standards of market conduct FX as an example Commodity derivatives and related spot contracts

18 Market Conduct Rob Moulton Richard Brearley - Macquarie These materials are for training purposes only and are not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Please take legal advice before applying anything contained in these materials to specific issues or transactions. For more information please contact the presenters or your usual contact. AUSTRALIA BELGIUM CHINA FRANCE GERMANY HONG KONG SAR INDONESIA (ASSOCIATED OFFICE) ITALY JAPAN PAPUA NEW GUINEA SAUDI ARABIA (ASSOCIATED OFFICE) SINGAPORE SPAIN SWEDEN UNITED ARAB EMIRATES UNITED KINGDOM UNITED STATES OF AMERICA