New market abuse rules enacted.

The Market Abuse Regulation (‘MAR’) was passed in April 2014 in order to ‘establish a more uniform and stronger framework in order to preserve market integrity, to avoid potential regulatory arbitrage, to ensure accountability in the event of attempted manipulation, and to provide more legal certainty and less regulatory complexity for market participants.’ The Regulation has now been implemented in the UK by the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016, which are due to come into force on the 3rd July 2016. The principal effects of the 2016 Regulations are as follows:

  • Under reg 3 of the 2016 Regulations, the FCA is designated as the competent authority for the purposes of MAR.
  • Regulation 5 and the Schedule of the 2016 Regulations put in place rules relating to the reporting of actual or potential contraventions of MAR. The Schedule provides that the FCA must (i) have staff members dedicated to handling reports of contraventions; (ii) publish on its website certain information regarding the receipt of reports of contraventions, including how to report a contravention and the processes put in place to deal with such reports; (iii) establish secure, independence and confidential channels for the reporting of contraventions; and (iv) keep records of every reported contravention. The FCA must review these procedures at least once every two years.
  • Regulations 8-10 of the 2016 Regulations amend the Financial Services and Markets Act 2000, so as to provide further powers to the FCA (e.g. increased powers to gather information).
  • Regulations 11-22 of the 2016 Regulations provide for amendments to a raft of existing legislation.
  • Regulation 23 provides that, at intervals not exceeding five years, the Treasury must carry out a review of the 2016 Regulations and publish a report setting out the conclusions of its review.

More information on MAR, including links to the various consultation documents, is provided by the FCA and can be obtained by clicking here.

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