The Market Abuse Regulation becomes law on 3 July 2016 and will replace the UK’s existing civil regime. The Regulation will rely on a range of secondary legislation including a number of regulatory and implementing technical standards.

In March, the Commission published the following:

• a delegated regulation setting out the regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures (if neither the Council nor European Parliament raise any objections, it will enter into force on the day after its publication in the Official Journal of the EU and apply from 3 July 2016) – to see the text in full, click here,
• an implementing regulation setting out the implementing technical standards with regard to the precise format of insider lists and for updating insider lists ((the regulation entered into force on 12 March 2016 (the day after its publication in the Official Journal) and applies from 3 July 2016) – to see the text in full, clickhere, and
• an implementing regulation setting out the implementing technical standards with regard to the timing, format and template of the submission of notifications to competent authorities by operators of regulated markets and investment firms, and operators of multilateral or organised trading facilities (the regulation entered into force on 18 March 2016 (the day after its publication in the Official Journal) and applies from 3 July 2016) – to see the text in full, click here.

On 21 March 2016, the European Securities and Markets Authority (ESMA) responded to the EU Commission’s letter of 14 March 2016 requesting it to redraft three regulatory technical standards (RTS). The draft RTS relate to:

1. The application of position limits to commodity derivatives
2. The criteria for establishing when an activity is ancillary to the main business
3. Non-equity transparency

In its response, ESMA notes that unless the Commission states otherwise, it considers the Commission’s letter to contain all the intended amendments to the RTS and to also represent a formal notification under Regulation 1095/2010 to endorse the RTS once amended.

Source: William Fry

Source: FTSE Global Markets

The Serious Fraud Office has announced that it has closed its investigation into allegations of fraudulent conduct in the FX market due to insufficient evidence for a realistic prospect of conviction. The SFO’s press release states that, while there were reasonable grounds to suspect the commission of offences involving serious or complex fraud, a detailed review of the available evidence led the SFO to conclude that the alleged conduct, even if proven and taken at its highest, would not meet the evidential test required to mount a prosecution for an offence contrary to English law. The SFO commenced its investigation in July 2014, following referral of the matter by the FCA.

Source: Cummings Law

Calls by banks and asset managers for a swift finalisation of Europe’s controversial trading reforms were dashed after policymakers rejected regulator proposals on commodity position limits and transparency rules in bond markets.

The European Commission, the EU’s executive arm, has asked the European Securities and Markets Authority to rewrite three technical standards governing trading on commodities, exemptions for companies providing ancillary market services and displaying prices in fixed income markets.[Read more]

Source: Financial Times

This article looks at MiFID 2’s requirements on best execution and the changes UK firms will need to adjust to.

MiFID 2 will bring significant changes to the way in which firms conduct their trading business and the policies and procedures they have in place for informing clients and evidencing compliance. In this article, Emma Radmore looks at the changes MiFID 2 makes to best execution requirements, and the changes firms will need to make to comply with MiFID 2’s standards. [Read more]

Source: Dentons

This year will see an overhaul of the market abuse regime across the EU with the implementation of the new Market Abuse Regulation (MAR) under the latest Market Abuse Directive (MAD II). MAR comes into force on 3 July 2016 alongside the Directive on criminal sanctions for market abuse (CSMAD) from which the UK has opted out. The new regime aims to enhance market integrity and investor protection.

As a regulation, MAR will have direct effect in all member states and will supersede the UK’s current market abuse regime contained in the Financial Conduct Authority (FCA) handbook and Financial Services and Markets Act 2000 (FSMA). The FCA is currently conducting a consultation on updating the FCA handbook and FSMA to reflect the impending changes. [Read more]

Source: Shoosmiths

On March 7, the Senior Managers Regime (SMR) went into effect for UK-based banks and insurers, replacing the existing UK-approved person rules for all senior managers within scope at relevant firms. Other firms regulated by the Financial Conduct Authority (FCA) will be brought into scope in 2018.

To show their commitment to the SMR going into effect, the FCA, the Prudential Regulation Authority (PRA) and the Payment Systems Regulator (PSR) have each applied the core principles of the SMR to their own senior staff.

Details on the FCA’s application of the SMR can be found here.

Details on the PRA’s application of the SMR can be found here.

Details on the PSR’s application of the SMR can be found here.

Source: Katten Muchin Rosenman LLP

The Market Abuse Regulation (MAR) refers to concepts that will be introduced by MiFID II, such as organised trading facilities (OTFs), small and medium-sized enterprise (SME) growth markets, and emission allowances or auctioned products based on them. MAR states that its provisions will not apply to those concepts until 3 January 2017. This was the scheduled date of entry into application of MiFID II. However, on 10 February 2016, the European Commission published a draft directive to delay this by 12 months to 3 January 2018. The Commission has, therefore, also published a draft regulation to amend, amongst other things, MAR, so that its provisions will not apply to the above concepts until 3 January 2018.

Source: Hogan Lovells

The Market Abuse Regulation (MAR) enters directly into force on 3 July 2016, replacing and repealing the existing framework under the Market Abuse Directive (MAD). The new MAR regime aims to introduce a single market abuse rulebook across EU member states, allowing less scope for national discretion than under the existing MAD rules. The new framework seeks to enhance confidence in the integrity of European markets and in so doing it is hoped to reduce regulatory and administrative costs, especially for firms operating on a cross-border basis. [Read more]

Source: William Fry