MAD II / MAR. MAD II / MAR Part 2 SHCOG MATERIAL PROJECT STATUS UPDATE 2 ND JUNE ST JUNE 2016

Transcription

1 MAD II / MAR MAD II / MAR Part 2 PROJECT STATUS UPDATE SHCOG MATERIAL 2 ND JUNE ST JUNE 2016

2 Overview Investment Recmmendatins Update Insider Lists STORs & Surveillance Benchmarks Market Sundings 2

3 INVESTMENT RECOMMENDATIONS - OVERVIEW Backgrund The Market Abuse Regulatin seeks t increase market integrity and investr prtectin. MAR builds upn existing MAD I rules. The Investment Recmmendatins regime strengthen the requirements t ensure infrmatin is bjectively presented and t disclse any cnflicts f interest. MAR will cme int frce n 3 July Impact in shrt The requirements will have a substantial impact n certain Sales and Trading practices. Extensive disclsures requirement with respect t cnflicts f interest management are impsed when prducing and/r disseminating recmmendatins in relatin t financial instrument s admitted t trading r traded n an EU venue, r the financial instrument s Issuer, where it is disseminated t the public r thrugh public distributin channels (nte this can be mre than ne client). If yu are unsure what cnstitutes an investment recmmendatin please cntact yur lcal cmpliance fficer. Distributin Channels MAR establishes that investment recmmendatins that fall under MAR s scpe are thse intended fr distributin channels r fr the public. ESMA said that the test fr intended distributin channels will be satisfied if the investment recmmendatin is intended r expected t be distributed t clients r even a specific segment f clients whatever the number. 3

4 What des the Investment recmmendatin regime cver in PRACTICE? What Hw T wh Infrmatin cntaining recmmendatin r investment strategy (implicitly r explicitly) Financial analysis Opinin f present/future value r price f in scpe instruments Related t: MiFID financial instruments traded n EU venues Financial instruments issuers OTC instruments fr which the price depend n/ has an effect n a financial instrument referred abve Written recmmendatins: intranet, extranet, website, s, letters, Blmberg, Reuters, scial netwrks, etc. Nn-written recmmendatins: presentatins, pitches, meeting, rad shws, web TV, face t face meetings, phne, etc. T the public T a limited number f clients r mre than ne client (ESMA guidance) Dn t mix up with Investment Advice They are persnal recmmendatins, subject t MiFID suitability requirements; Recmmendatin is presented as suitable and based n a cnsideratin f the individual s circumstances. This is made t a persn in his capacity as a) an investr r ptential investr r b) an agent fr an investr r ptential investr The prvisin f persnal recmmendatins t a client, either upn its request r at the initiative f the investment firm, in respect f ne r mre transactins relating t financial instruments (EU r nn- EU); By wh Emplyees f BNP Paribas (wh meet the applicable definitin) Persns disseminating The persns wh prduces the investment recmmendatins The persns wh frward third party research Including thse wh are making substantial alteratins (summary r extract) t riginal recmmendatin Such Persns culd include sales, trading, structuring and research persnnel. i.e. anyne prducing r sending an investment recmmendatin Please nte that 1:1 client cnversatins and reverse enquiries are ut f scpe. 4

5 ACTIVITIES included and excluded (industry agreed psitin) 5

6 INSIDER LISTS Technical Overview The primary requirement that issuers, and thse acting n its behalf, are t hld and maintain insider lists remains. New requirements are that the exact time (hur / minute) must be recrded fr these lists. There is additinal detail that is required t be held n the insider list including, but nt limited t, persnal cntact number and address. MAR als prescribes the frmat f which the insider list is t be kept and additinal acknwledgment requirements. 6

7 Surveillance Preparatin fr MAR/CSMAD Insider dealing Unlawful disclsure f inside infrmatin Market manipulatin (including Crss Market / Crss Prduct) STORs (quality / near misses) Cmmunicatin surveillance: Hlistic; and State f readiness f the UK markets in general and surveillance specifically 7

8 BENCHMARKS The manipulatin f financial benchmarks is a new ffence, under the brader market manipulatin ffence, which is: transmitting false r misleading infrmatin r prviding false r misleading inputs in relatin t a benchmark where the persn wh made the transmissin r prvided the input knew r ught t have knwn that it was false r misleading, r any ther behaviur which manipulates the calculatin f a benchmark. 8

9 MARKET SOUNDINGS Technical Overview The Market Sunding Regulatry Technical Standards cver: All securities listed/t be listed (except EURO PP (Private Placement)) Als material blck trade (secndary market) & takever and mergers? Terms: Disclsing Market Participant (DMP) e.g. the sell-side Market Sunding Beneficiary (MSB) e.g. the issuer Market Sunding Recipient (MSR) e.g. the receiver The Market Sunding are carried ut n behalf f the issuer / seller / bidder (MSB). With inside infrmatin r withut inside infrmatin. Where prviding inside infrmatin, DMP is bliged t Cleanse sunded parties (MSR). Detailed recrd keeping requirements which must be retained fr 5 years. In scpe parties : The entity carrying ut the market sunding (DMP). The entity receiving the market sunding (MSR). 9

10 MARKET SOUNDINGS Practicalities Practical cnsideratins when giving sundings Wh perfrms the sunding in each team? Wh is respnsible fr what? (e.g. wh makes the assessment fr whether infrmatin is Inside Infrmatin and hw t d they make that assessment?) Is the analysis n whether r nt inside infrmatin exists dcumented? What clients can we market sund? What clients have tld us that they dn t want t be market sunded? Is the Issuer s/seller s/bidder s cnsent dcumented? Wh mnitrs when Inside Infrmatin ceases t becme such? Where prviding Inside Infrmatin, have all the ptential MSRs been prperly cleansed? Where are recrds held? 10

11 Extra- Territriality 1. Hw will cuntries utside the EU align with this regularin 2. Glbal Organisatins will need t cnsider extraterritriality 11 11

12 FCA apprach three buckets Investment Recmmendatins Investment Advice 1. Remainder f MAD MAR regulatin 12 12

13 APPENDIX Investment Recmmendatins - DISCLOSURE REQUIREMENTS Example (nn-exhaustive list) Recrd Keeping General Disclsures Presentatin Specific Disclsures Existing Recmmendatins Audit trail f all investment recmmendatins prduced n any issuer, r financial instrument and disseminated in the last 12 mnths perid. This shuld cntain fr each recmmendatin. e.g. price target and the relevant market price at the time f disseminatin, directin f recmmendatin, validity time perid f the recmmendatin. Identity f the prducer Cmpetent authrity f the prducer Date and time at which the recmmendatin was cmpleted and disseminated, all relatinships and cnflicts f interest, interests f thse in the same grup as the prducer Valuatin r methdlgy will need t be explained and referenced Infrmatin must be presented bjectively and in a clear and prminent manner Infrmatin relating t cnflicts shuld be specific enugh as t enable the recipient t take an infrmed view f the degree and nature f the cnflict e.g. remuneratins f prducers f recmmendatin linked t trading fees Surces f infrmatin must be disclsed, the prjectins, frecasts and price targets must be clearly labelled as such. Must disclse whether legal entity s net lng r shrt psitins held >0.5% f the ttal issued share capital threshld (calculated as per the Shrt Selling Regulatins) and disclse in relatin t hldings where the issuer hlds >5% f ttal issued share capital N.B. crprate bnds, svereign debt/cdss are ut f scpe Still need t disclse cnflicts that we have a psitin in the instrument/issuer in a recmmendatin withut the threshld Persnal hlding n issuers r financial instruments It als applies t summaries r extracts f recmmendatins and alteratins which have been made t recmmendatins since the last recmmendatin (by sales persn/ desk/ entity- fr BNPP t determine apprach) Recmmendatins prduced by third parties (e.g. sales frwarding research) need t be clearly identified as such and summary r extracts frm riginal recmmendatin 13