Market Abuse

The European Securities and Markets Authority (ESMA) has published today its annual report on the application of accepted market practices (AMP) in accordance with the Market Abuse Regulation (MAR). AMPs are a defence against allegations of market manipulation. In particular, dealings in financial markets which are carried out for legitimate reasons and in conformity with an established AMP will not constitute market manipulation.

ESMA’s report provides an overview on the establishment and application of AMPs in the EU, with particular reference to the AMPs established on the basis of the Market Abuse Directive and which were still in force when MAR became applicable, and the AMPs which have been established under MAR.

The report includes ESMA’s views on the application of AMPs together with recommendations to National Competent Authorities.

Background

MAR’s purpose is to guarantee the integrity of European financial markets and promote investor confidence. The concept of market abuse typically consists of insider dealing, unlawful disclosure of inside information, and market manipulation.

However, some exceptions apply, for example, MAR provides a defence against market manipulation if the transaction was legitimate and carried out in accordance with an AMP and MAR describes the non-exhaustive factors that a competent authority should take into account before deciding whether or not to accept a market practice.

The European Securities and Markets Authority (ESMA) has published today its first annual report concerning administrative and criminal sanctions as well as other administrative measures issued by National Competent Authorities (NCAs) under the Market Abuse Regulation (MAR).

The relevant infringements under MAR to which the sanctions and administrative measures refer to include, amongst others:

  • insider dealing and unlawful disclosure of inside information (Article 14 MAR); and
  • market manipulation (Article 15 MAR).

MAR foresees administrative sanctions for infringing the Regulation, which depending on the gravity of the infringement, can amount up to 5,000,000 Euros.

The report is issued pursuant to Article 33 of MAR and contains aggregated information on administrative and criminal sanctions and other administrative measures imposed in the EU on the basis of MAR from 3 July 2016 (date on which MAR became applicable) to 31 December 2017.

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