Commission issued proposals for a review of MAD

Published in the Official JournalDirective & Regulation

Oct 2011

June 2014

Market Abuse Directive & Regulation (MAD & MAR)

Background

The Commission published a review of the Market Abuse Directive 2003/6/EC (MAD) on 20 October 2011 in the form of a Regulation (MAR) and a Directive (MAD), alongside the MIFID review. The proposed Regulation and Directive are to ensure effective sanctions at European level for Insider Dealing and Market Manipulation.

The MAD prohibits insider dealing, recommending or inducing another person to engage in insider dealing and market manipulation. The European Parliament sought to ensure that these would be considered as criminal offences and when committed intentionally punishable by a maximum term of imprisonment of at least four years.

The MAR establishes a common regulatory framework on insider dealing, misuse of inside information and market manipulation as well as measures to prevent market abuse to ensure the integrity of financial markets in the Union and to enhance investor protection and confidence in those markets. The extended scope of the Regulation includes any financial instrument traded on a regulated market, multilateral trading facilities (MTF) or an organised trading facilities (OTF), or any other conduct or action which can have an effect on such a financial instrument

Latest News

Regulation No 596/2014 on market abuse (Market Abuse Regulation) and Directive 2014/57/EU on criminal sanctions for market abuse (Market Abuse Directive) was published in the EU Official Journal on 12 June 2014. The Market Abuse Regulation will enter into force in July 2016. Member States have two years to transpose the Directive on criminal sanctions for market abuse into their national law. The new rules on market abuse update and strengthen the existing framework to ensure market integrity and investor protection provided by the existing Market Abuse Directive ( 2003/6/EC) will now be repealed.

In June 2014, the European Commission sent a mandate to ESMA requesting technical advice on the Regulation and the Directive. In its mandate, the Commission has advised that certain elements of the Regulation need to be further specified inimplementing acts to be adopted by the Commission. The implementing acts shall specify the procedures to enable reporting of actual or potential infringements of this Regulation to competent authorities, including the arrangements for reporting and for following up reports and measures for the protection of persons working under a contract of employment and measures for the protection of personal data. ESMA is asked to provide this technical advice within 8 months after the entry into force of the Regulation.

Entry into force July 2016