CESR’s review shows some divergence in the application of the MAD regime, but a greater level of divergence for MTFs. CESR recommends further work on the extension of the MAD regime to MTFs, once the Commission has addressed the issue in the MAD review.
CESR publishes a review of how securities regulators across Europe use options and discretions applied by CESR Members under the European Market Abuse Directive regime, (MAD regime) which is made up of the Market Abuse Directive (MAD) and its Level 2 implementing measures as developed by CESR.
Overall, the review by CESR showed some divergence in the application of the MAD regime, but a greater level of divergence for Multilateral Trading Facilities (MTFs).
Divergences also exist in all other areas addressed. Regarding the information of decisions to delay the publication of inside information, 16 Members require notification of the regulator should the issuer decide to delay the publication of such information, while 11 do not.
For the notification of transactions by persons discharging managerial responsibilities, eight Members have added requirements in addition to the minimum ones following from the implementing directive. Also, the reasons for possible exemptions to professional secrecy vary in the membership and, as CESR has highlighted in previous work (Ref. CESR/07-380) of the Review Panel, sanctions regimes differ between Member States.
Regarding disclosure of measures or sanctions, the report shows a clear division in the CESR membership between those regulators that publish every measure or sanction on market abuse violations (19) and those that do not (10). Secondly, there are also divergences in relation to measures to ensure that the public is correctly informed. 15 members supervise directly the measures in place to ensure that the public is correctly informed and the tools and methods for doing so vary.
The report also revealed variations in the content required of Suspicious Transaction Reports (STRs). This concerned, for example, whether additional guidance has been issued, how the materiality thresholds have been set, and the extent to which OTC derivatives are covered in such STR reports. Furthermore, nine Member States require and nine Member States encourage persons to voluntarily report suspicious unexecuted orders to trade.
Based on this survey, a number of recommendations for further work by CESR to increase convergence are proposed. This includes further work on the extension of the MAD regime to MTFs, once the Commission has addressed this issue in the MAD review. Further, CESR’s Review Panel recommended that all Member States encourage the reporting of STRs on OTC derivatives, where the underlying asset is an instrument admitted to trading on a regulated market, until such time as it becomes mandatory due to changes to the MAD directive.
© CESR - Committee of European Securities Regulators
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