An Ounce of Prevention is Worth a Pound of Cure: US Cues for a Revision of the EU Market Abuse Regulation

The European Union (EU) was arguably the first body to establish multinational anti-market abuse laws aimed at enhancing the detection and curbing of cross-border market abuse activities in its Member States. Put differently, the EU Insider Dealing Directive was adopted in 1989 and was the first law that harmonized the insider trading ban among the EU Member States. Thereafter, the European Union Directive on Insider Dealing and Market Manipulation (EU Market Abuse Directive) was adopted in a bid to improve and effectively discourage all forms of market abuse in the EU’s securities and financial markets. However, the EU Market Abuse Directive had its own gaps and flaws. In light of this, the Market Abuse Regulation and the Criminal Sanctions for Market Abuse Directive were enacted to repeal and replace the EU Market Abuse Directive in 2016. The article examines the adequacy of the EU Market Abuse Directive and its implementation in the United Kingdom (UK) prior to the UK’s vote to leave the European Union (Brexit). This is done to investigate the possible implications of the Brexit referendum outcome of 23 June 2016 on the future regulation of market abuse in the UK.

The EU Market Abuse Directive: understanding the implications

Journal of Investment Compliance ◽

10.1108/15285810510644875 ◽

2005 ◽

Vol 6 (2) ◽

pp. 30-37 ◽

Cited By ~ 2

Author(s):

Alan Mangelsdorf

Keyword(s):

Market Abuse ◽

The Eu ◽

Market Abuse Directive

The EU Market Abuse Directive: A Case-Based Analysis

SSRN Electronic Journal ◽

10.2139/ssrn.1066603 ◽

2007 ◽

Cited By ~ 2

Author(s):

Mathias M. Siems

Keyword(s):

Market Abuse ◽

Case Based ◽

The Eu ◽

Market Abuse Directive

The EU and Market Abuse

CFA Magazine ◽

10.2469/cfm.v25.n4.14 ◽

2014 ◽

Vol 25 (4) ◽

pp. 51-52

Author(s):

Mirzha de Manuel Aramendia

Keyword(s):

Market Abuse ◽

The Eu

13 Financial Crime

10.1093/law/9780199688753.003.0013 ◽

2016 ◽

Cited By ~ 1

Author(s):

Morris Simon

Keyword(s):

Money Laundering ◽

Financial Crime ◽

Inside Information ◽

Misleading Information ◽

Principal Role ◽

Market Abuse ◽

Financial Crimes ◽

Insider Dealing ◽

The Uk ◽

The Eu

This chapter concerns financial crime. While the Financial Conduct Authority (FCA) can prosecute offences such as insider dealing and money laundering, its principal role in relation to financial crime is to require authorised firms to take adequate steps to protect against the risk of being used in connection with such offences. The elements (offences, defences, and penalties) of market abuse under the UK regime—which implements the EU Market Abuse Directive (MAD)—are explained. The main types of behaviour which can constitute market abuse—dealing on inside information, disclosing inside information, manipulating transactions, manipulative devices, disseminating misleading information—are analysed. The UK regulatory position on money laundering, fraud and other financial crimes is also considered.

5 Market Abuse

Regulation of Commodities Trading ◽

10.1093/law/9780198799962.003.0005 ◽

2020 ◽

Author(s):

De Carvalho Robalo Pedro

Keyword(s):

Financial Crisis ◽

Market Efficiency ◽

European Commission ◽

Market Manipulation ◽

Market Abuse ◽

Criminal Sanctions ◽

Insider Dealing ◽

Broad Framework ◽

Undue Advantage ◽

The Eu

This chapter assesses market abuse. Market abuse offences, in all of their possible forms, frustrate the concept of market efficiency by allowing undue advantage to the individuals performing the abusive actions, thus jeopardizing the development of fair and orderly markets. In turn, this is likely to harm confidence by undermining investors' beliefs that the market is fair, leading them to withdraw their investments. In Europe, the first European-wide legislative package was initiated with the adoption of the Market Abuse Directive in 2003 (Directive 2003/6/EC), with the aim of providing a broad framework that would address market manipulation and insider dealing practices in the EU. However, in the aftermath of the Financial Crisis in 2008, a review of the regime was required as a number of deficiencies were found. In 2011 and in order to address these issues, the European Commission adopted the proposal for the Regulation on insider dealing and market manipulation (MAR) as well as the Directive on Criminal Sanctions for Insider Dealing and Market Manipulation (CSMAD).

Investment recommendations under the Market Abuse Regulation (MAR) – operative guidelines issued by the Italian Securities and Exchange Commission (CONSOB)

Journal of Investment Compliance ◽

10.1108/joic-06-2017-0044 ◽

2017 ◽

Vol 18 (3) ◽

pp. 85-90

Author(s):

Lorenzo Parola ◽

Francesco Falco

Keyword(s):

Design Methodology ◽

Securities And Exchange Commission ◽

Financial Instruments ◽

Misleading Information ◽

Content Type ◽

The Public ◽

Market Abuse ◽

Practical Guidance ◽

Definition Of ◽

The Eu

Purpose Analysis of the guidelines on investment recommendations (“Guidelines”) issued by the Italian Securities and Exchange Commission (“CONSOB”) on the application of the EU Regulation No. 596/2014, the Market Abuse Regulation (“MAR”). Design/methodology/approach This article focuses on the Guidelines issued with the aim to facilitate the identification of unlawful conducts of firms and individuals disseminating investment recommendations on financial instruments or issuers. In particular, the definition of investment recommendations as per MAR, the duties of persons providing such information and also the investigative powers conferred to CONSOB in order to prevent the dissemination of false or misleading information to the public are examined in detail. Findings The Guidelines are an important interpretative tool for firms and individuals providing investment recommendations on financial instruments or issuers. They further determine the duties deriving from MAR and the investigative powers attributed to CONSOB. Originality/value This article provides useful information on MAR and practical guidance on the applicability of this regulation to persons and firms providing investment recommendations on financial instruments or issuers.

The EU market abuse regulation, where does it leave us?

Journal of Financial Regulation and Compliance ◽

10.1108/jfrc-08-2017-0062 ◽

2018 ◽

Vol 26 (4) ◽

pp. 482-504

Author(s):

Andrew Haynes

Keyword(s):

Financial Services ◽

General Assumption ◽

Inside Information ◽

Content Type ◽

Market Abuse ◽

Insider Dealing ◽

Potential Impact ◽

Definition Of ◽

The Impact ◽

The Eu

Purpose The purpose of this paper is to provide an analysis of the market abuse regulation to determine whether the general assumption that it has made little difference to the pre-existing UK law on market abuse is accurate. In particular, the potential impact on compliance and behaviour in financial services firms and those who potentially receive inside information is considered. Design/methodology/approach The methodology adopted is a combination of critical analysis and black letter law utilised to determine the content and potential impact of the market abuse regulation. A process of discovery made more important by the limited assistance given by the European Securities and Markets Authority and the Financial Conduct Authority in terms of the guidance and definitions they have provided. Findings The new Regulation has a wider definition of insider dealing than under the previous law, has a wider application in terms of the financial instruments that it applies to, has triggered significant new compliance and disclosure requirements and it also extends the law to new markets. Research limitations/implications There are limitations in that the relevant regulatory bodies, ESMA and the FCA have made little effort to clarify how they interpret the new Regulation. This is a serious problem because in the case of the FCA, their view will impact on the approach they will take in future enforcement actions. Practical implications This paper provides the first real analysis of the market abuse regulation’s effect and shows that, if carefully analysed in context, it has a significant impact on firms in the financial services sector and those engaged in activities which can put them in receipt of inside information. It will cause an increase in relevant compliance and has significant cost implications for affected firms. Social implications This is not really relevant here. There will be necessary changes to compliance procedures. Originality/value The originality stems from the fact that there appears to be little else published which has engaged in a sustained analysis of the impact and effect of the EU market abuse regulation on the UK’s financial markets and those other firms who receive inside information.

Market abuse regime in the EU

10.5040/9781526514394.chapter-004 ◽

2021 ◽

Keyword(s):

Market Abuse ◽

The Eu