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Financial Regulation: Market Abuse Regulation (MAR)

5th November 2015

Today the FCA commenced a consultation on the policy proposals and handbook changes related to the implementation of the Market Abuse Regulation via the publication of Consultation Paper CP15/35.

This consultation paper sets out the changes to the regulatory Handbook as well as the policy proposals for the implementation of the new European wide Market Abuse Regulation (MAR), which is timetabled to apply in the UK as of the 3rd July 2016.

The consultation focuses upon two specific issues, one being the implementation options the new MAR regime offers to EU member states (and in particular to two specific areas) and the other being the affect the new Market Abuse regime will have in moving from a ‘Directive’ to a ‘Regulation’.

MAR Implementation Options for Consultation:

The first issue the FCA raises for consultation is in relation to choices for implementing two specific EU MAR requirements, and how they may apply in the UK, these being:

• The requirement to provide an explanation of the delay to disclosure of inside information; and
• The threshold for disclosure of managers’ transactions

Comments are invited on the proposals to be received by the FCA by 4th February 2016.

The Market Abuse Regime is changing from a Directive to a Regulation:

What does this mean?

When the new Market Abuse Regulation (MAR) repeals the existing Market Abuse Directive (MAD) next July, the regime will be changing its legal status from a directive to a regulation, but what does this actually mean?

The difference is to do with how the regime is implemented. The Market Abuse Directive had to be implemented in member states via state legislation, so in the UK this meant via provisions in the FSMA and FCA Rules. However, as a regulation, the new European Market Abuse Regulation (EU MAR) will have a direct application to the EU’s member states.

As a result, where there are existing legislative provisions within the UK’s domestic regime, these will have to be revised to ensure that national law complies with EU MAR. This means that various existing provisions in the FCA Handbook will in future be covered under European Regulation and thus will be removed from the Handbook to avoid conflict.

Whilst this will mean that various parts of the Handbook relation to market abuse will be deleted, the FCA has said, however, that where possible, those provisions in the Handbook that are compatible with EU MAR will be retained and they will also plan to provide signposting to the relevant EU legislation.

Whilst the FCA’s consultation paper relates to the proposals for change to the civil regime regarding the implementation of the new regulation, they also stress that these proposals do not cover the UK criminal market abuse regime as set out in Part 5 of the Criminal Justice Act 1993 and Part 7 of the Financial Services Act.

For more details on the Market Abuse Regulation (MAR) and its aims, please see our previous article: Market Abuse Regulation (MAR).

Support & Assistance:

If you would like further information or assistance on the application of MAR for your business, please get in touch with our Regulatory Support team.

FCA consults upon MAR implementation