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27th April 2016

ESMA proposes guidelines for commodity derivatives markets or related spot markets on information expected or required to be disclosed under MAR.

ESMA Consultation Paper on MAR Information Disclosure

Last month (30 March 2016) the European Securities and Markets Authority (ESMA) issued a consultation on Guidelines for Commodity Derivatives Markets and Related Spot FX Markets and their obligations for disclosing information under the new Market Abuse Regulations (MAR).

When MAR takes effect on 3rd July 2016, the European Regulation will become directly applicable to almost all financial services firms within the UK as well as to other member states across the EU.

MAR Information Disclosure Requirements

Commodity Derivatives & Spot FX Markets

MAR provisions for the management of inside information and prohibits its use. Prior to its implementation, ESMA is tasked with establishing a “non-exhaustive indicative list of information which is reasonably expected or is required to be disclosed” under MAR.

Thus, ESMA’s latest consultation seeks to obtain views on its proposed indicative list of information for the commodity derivatives or spot markets. The purpose of publishing the information on the list once MAR is up and running will be for the purposes of determining inside information regarding commodity derivatives and of the triggers for the prohibitions of insider dealing.

The deadline for responses to ESMA on their MAR Guidelines for Commodity Derivatives & Spot FX Markets is no later than by 20th May 2016 and the finalised report and guidelines are expected to be published by late Q3 in 2016 (thus likely after MAR takes effect).

Whilst ESMA’s indicative list will assist many in these markets as to what may or may not be considered inside information under MAR, firms should be reminded that this list is non-exhaustive. Thus if something is not listed, it does not mean that it might not be considered inside information. And vice versa, ESMA advises that whilst a particular type of information might be detailed upon the list, that doesn’t necessarily mean that it is considered inside information.

Take Action: Prepare for MAR now

The MAR regime has much wider scope that the existing Market Abuse Directive, as we have discussed previously. With the implementation date only two months away, market participants will need to consider now how they will comply with MAR’s requirements when the new market abuse rules take effect on 3rd July 2016.

MAR Implementation Support & Assistance:

If your firm is in the midst of preparing for the new Market Abuse Regulation and would like to discuss how MAR may affect your business and what you may need to do to finalise your MAR preparations, please contact our regulatory and compliance specialists who would be happy to help.

MAR Information Disclosure: Commodity Derivative & Spot FX Markets