Market Integrity

The European Securities and Markets Authority (ESMA) has issued today an update of its Q&As on the European Benchmarks Regulation (BMR).

The new Q&As provide clarification on the following issues:

  • the information included in the ESMA register of administrators of benchmarks;
  • determination of the Member State of reference; and
  • the role of IOSCO principles and of external audit in the recognition of 3rd country administrators.

The purpose of this document is to promote common supervisory approaches and practices in the application of the BMR. It provides responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of the BMR. The content of this document is aimed at competent authorities under the Regulation to ensure that in their supervisory activities their actions are converging along the lines of the responses adopted by ESMA. It also provides guidance to market participants by providing clarity on the BMR requirements.

Today the EUR risk-free rates working group published a consultation paper on the “EONIA to €STR legal action plan”, reaching out to market participants about the need of implementing a legal action plan to ensure a smooth transition from EONIA to €STR in new and legacy contracts.

The consultation highlights the potential consequences if legacy contracts are not amended or if market participants are not operationally ready to use €STR. It also deals with the Benchmark Regulation (BMR) requirement of including fall-back clauses in contracts referencing benchmarks (BMR Article 28.2).

The European Securities and Markets Authority (ESMA) is part of the working group and encourages stakeholders to provide feedback by 12 of June.

The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers on data reporting under the Market in Financial Instruments Regulation (MiFIR).

The Q&As provide clarifications in relation to the requirements for submission of reference data under MiFIR. In particular, the Q&As relate to reporting obligations for trading venues operating on the basis of a specified list of instruments.

The Q&A on a defined list of instruments provides new answers on how operators of trading venue(s) should report instrument reference data in accordance with Article 2 of RTS 23 and related MAR RTS and ITS. The amendments to the existing Q&A on MiFIR data reporting becomes effective from 9 April 2019.

The purpose of this Q&A is to promote common supervisory approaches and practices in the application of MiFIR. It provides guidance to Investment Firms, Trading Venues, ARMs and Systematic Internalisers on compliance with the reporting provisions of MiFIR. ESMA will periodically review these Q&A and update them where required.

The European Securities and Markets Authority (ESMA) has updated its Questions & Answers (Q&A) document regarding the implementation of the Market Abuse Regulation (MAR).

The purpose of the Q&A document is to promote common supervisory approaches and practices in the application of MAR and its implementing measures. Today’s Q&A include an update of the Q&A clarifying the scope of firms subject to the MAR provision to detect and report suspicious orders and transactions and new detailed answers on:

  • Meaning of parent and related undertakings; and
  • Disclosure of inside information concerning emission allowances, referring to installations of other undertakings of the group of the EAMP.

MAR is intended to guarantee the integrity of European financial markets and increase investor confidence. Any unlawful behaviour in the financial markets is prohibited. The concept of market abuse typically consists of insider dealing, unlawful disclosure of inside information, and market manipulation.

The European Securities and Markets Authority (ESMA) has issued an official opinion agreeing to an emergency net short position ban, for a period of two months, by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) on net short positions in Wirecard AG (Wirecard) shares under the Short Selling Regulation.

The measure entered into force at 06:00 CET today (before trading session) and is applicable until close of day (midnight CET) on 18 April 2019. It temporarily prohibits transactions in any shares, either directly or through related instruments and irrespective of the venue or market in which the transactions leading to those positions are conducted. The measure does not apply to market-making activities, trading in index-related instruments or short positions entered into to hedge positions on convertible bond or subscription rights.

The short selling measure applies to any natural or legal person, irrespective of their country of residence.

ESMA considers that the current circumstances related to Wirecard are adverse events or developments which constitute a serious threat to market confidence in Germany, and that the proposed measure is appropriate and proportionate to address the threat to German financial markets.

The European Securities and Markets Authority (ESMA) has issued today an update of its Q&As on the European Benchmark Regulation (BMR).

The new Q&A provide clarification on provisions of the BMR regarding the scope of application of the Commission Delegated Regulations adopted under the BMR depending on the type of benchmark and in particular:

·         Regulated-data benchmarks;

·         Interest-rate benchmarks; and

·         Commodity benchmarks.

The purpose of this document is to promote common supervisory approaches and practices in the application of the BMR. It provides responses to questions posed by the general public, market participants and competent authorities in relation to the practical application of the BMR. The content of this document is aimed at competent authorities under the Regulation to ensure that in their supervisory activities their actions are converging along the lines of the responses adopted by ESMA. It also provides guidance to market participants by providing clarity on the BMR requirements.

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.