The Market Abuse Regulation (MAR) came into effect on 3 July 2016. It aims to increase market integrity and investor protection, enhancing the attractiveness of securities markets for capital raising.
MAR strengthens the previous UK market abuse framework by extending its scope to new markets, new platforms and new behaviours.
It contains prohibitions of insider dealing, unlawful disclosure of inside information and market manipulation, and provisions to prevent and detect these.
This page is intended to assist readers of our Handbook. It should not be regarded as an exhaustive list of relevant information sources. Firms and individuals in scope of the MAR should review all of the regulation and ensure they are in compliance with all relevant provisions.
Application of MAR
The Market Abuse Regulation (MAR) applies to:
- financial instruments admitted to trading on a regulated market or for which a request for admission to trading on a regulated market has been made
- financial instruments traded on a multilateral trading facility (MTF), admitted to trading on an MTF, or for which a request for admission to trading on an MTF has been made
- financial instruments traded on an organised trading facility (OTF)
- financial instruments not covered by point (a), (b) or (c), the price or value of which depends on or has an effect on the price or value of a financial instrument referred to in those points, including, but not limited to, credit default swaps and contracts for difference
This Regulation also applies to behaviour or transactions, including bids, relating to the auctioning on an auction platform authorised as a regulated market of emission allowances or other auctioned products based thereon, including when auctioned products are not financial instruments, pursuant to Regulation (EU) No 1031/2010. Without prejudice to any specific provisions referring to bids submitted in the context of an auction, any requirements and prohibitions in MAR referring to orders to trade shall apply to such bids.
Additional information on preparation for Brexit
The Treasury has laid statutory instruments for the MAR and Short Selling Regulation (SSR) to convert them into UK law following the European Union (Withdrawal) Act 2018, if the UK leaves the EU without an implementation period (a no-deal scenario). The statutory instruments would create new obligations for issuers and market makers which would immediately apply from exit day in the event of a no-deal scenario. In our Primary Market Bulletin (21) we advise issuers and market makers of the new regulatory obligations that they will need to implement for MAR and the SSR, in a a no-deal scenario. This is particularly important for issuers with financial instruments admitted to trading or traded on a UK trading venue which are based in an EU Member State as they may need to take action before exit day. The new regulatory obligations relate to the paragraphs on buy-back programmes and stabilisation measures, disclosure and delaying disclosure of inside information, and manager's transactions below.
Read Primary Market Bulletin (21) for further information.
Structure of MAR
MAR was developed under the Lamfalussy process (find out more on section 4.3 of the FSA’s Guide to the European Union and its Legislative Processes (PDF)). It therefore consists of different ‘levels’:
- Level 1: Market Abuse Regulation (MAR)
- Level 2: Implementing measures: ESMA technical standards and Commission Delegated Acts
- Level 3: ESMA Guidelines and ESMA Q&As
- Domestic guidance: our Handbook
These sets of guidelines are mandated under MAR:
- ESMA Guidelines on information relating to commodity derivatives markets or related spot markets, for the definition of inside information on commodity derivatives (PDF)
These guidelines set out a non-exhaustive indicative list of information which is reasonably expected or required to be disclosed on relevant commodity derivative and spot markets (and could therefore fall within the definition of inside information for commodity derivatives).
Compliance: We notified ESMA of our intention to comply with this set of guidelines. We consulted on the changes to the Market Conduct sourcebook (MAR) in CP17/6.
These guidelines set out a non-exhaustive indicative list of legitimate interests of issuers, and of situations in which delay disclosure of inside information is likely to mislead the public.
Compliance: We notified ESMA of our intention to comply with this set of guidelines. We consulted on the changes to section DTR 2.5 of our Handbook in CP16/38.
The guidelines detail the factors, steps and appropriate records a person must take into account when information is disclosed as part of the sounding regime.
Compliance: We notified ESMA of our intention to comply with this set of guidelines. There is no need to amend the FCA Handbook to be compliant.
Interaction with MiFID II
The interaction between MAR and MiFiD II is explained in MAR Article 39.
Emission allowances market participants (EAMPs) and parties involved in relevant auctions have been required to comply with the following obligations from January 2018:
- disclose inside information relating to emission allowances: MAR Article 17
- maintain an insider list: MAR Article 18
- notify us of PDMRs transactions on emission allowances and auction products based on these: MAR Article 19
Market abuse offences
The definition of ‘inside information’ is broadly unchanged in MAR from the previous definition, but is wider to capture inside information for spot commodity contracts.
There is also a new definition of inside information for emission allowances and auction products based on these.
- Level 1: MAR Article 7
- Level 3: ESMA Guidelines on commodity derivatives (PDF)
- FCA Handbook: MAR 1.2, DTR 2.2
Insider dealing and unlawful disclosure
MAR clarifies that the use of inside information to amend or cancel an existing order constitutes insider dealing. It also prohibits persons in possession of inside information from using that information to deal or attempt to deal in financial instruments or to recommend or induce another person to transact on the basis of inside information.
- Level 1: MAR Article 8, MAR Article 9, MAR Article 10, MAR Article 14
- FCA Handbook: MAR 1.3, MAR 1.4
MAR introduces a framework to make legitimate disclosures of inside information in the course of market soundings. Provided certain requirements are met, disclosing market participants are protected from an allegation of unlawful disclosure of inside information.
- Level 1: MAR Article 11
- Level 2: Delegated Regulation 2016/960, Delegated Regulation 2016/959
- Level 3: ESMA Guidelines on market soundings and delay disclosure of inside information (PDF)
MAR defines and prohibits market manipulation. This offence has been extended to capture attempted manipulation, benchmarks and in some situations spot commodity contracts.
- Level 1: MAR Article 12, MAR Article 15, MAR Annex I
- Level 2: Delegated Regulation 2016/522
- FCA Handbook: MAR 1.6, MAR 1.7, MAR 1.8
Buy-back programmes and stabilisation measures
Providing certain requirements are met, trading in securities or associated instruments for the stabilisation of securities or trading in own shares in buy-back programmes are exempt from the prohibitions against market abuse.
You should email notifications for both stabilisation and buy-back programme activity to [email protected].
We have the following templates that issuers or firms submitting on behalf of an issuer may use when notifying us:
You do not have to follow these templates and should note that other national competent authorities may offer templates to use when notifying them.
- Level 1: MAR Article 5
- Level 2: Delegated Regulation 2016/1052
Accepted market practices (AMPs)
Regulators are able to establish an AMP, subject to certain criteria and conditions.
A practice that is accepted in a particular market by that market’s regulator cannot be considered as applicable to other markets unless the regulators of those other markets have also officially accepted the practice. Please note that we have not established any AMPs.
- Level 1: MAR Article 13
- Level 2: Delegated Regulation 2016/908
Disclosure and delaying disclosure of inside information
Issuers and EAMPs are required to publicly disclose inside information which directly or indirectly concerns them as soon as possible, but can delay the disclosure if certain conditions are met.
Issuers and EAMPs must notify us after delaying disclosure of inside information. They do not need to provide a written explanation setting out how the relevant conditions for delaying disclosure were met but should keep appropriate records in case we request this.
Where financial institutions intend to delay disclosure due to financial stability concerns they must satisfy a number of conditions, including notifying us of a delay to disclose.
- Level 1: MAR Article 17
- Level 2: Implementing Regulation 2016/1055, Delegated Regulation 2016/522
- Level 3: ESMA Guidelines on market sounding and delayed disclosure of inside information (PDF)
- FCA Handbook: DTR 2
MAR places an obligation on issuers, EAMPs and parties involved in the relevant auctions to maintain a list of all persons working for them that have access to inside information.
Firms subject to MAR Article 18 will be required to transmit their insider lists to us on request.
- Level 1: MAR Article 18
- Level 2: Implementing Regulation 2016/347
Suspicious transaction and order reports (STORs)
Certain market participants are required to monitor, detect and report suspicious transactions and orders to us. As under the previous regime, this requirement applies to any person professionally engaged in the arrangement or execution of transactions. Find out how to submit a STOR.
- Level 1: MAR Article 16
- Level 2: Delegated Regulation 2016/957
- Level 3: ESMA Q&As
- FCA Handbook: SUP 15.10
MAR Article 19 requires persons discharging managerial responsibilities within issuers (PDMRs), and persons closely associated with them (PCAs), to notify us and the issuer of relevant personal transactions they undertake in the issuer’s shares, debt instruments, derivatives or other linked financial instruments if the total amount of transactions per calendar year has reached €5,000. The issuer in turn must make that information public within 3 business days.
PDMRs and PCAs are only required to notify under Article 19 when they deal in shares or debt instruments of the issuer which are:
- subject to a request for or approval of admission to trading on an EU trading venue, or
- linked to financial instruments which are themselves subject to a request for or approval of admission to trading on an EU trading venue.
Dealing in instruments that do not fall into these categories does not need to be notified under Article 19.
Similarly, PDMRs within EAMPs, parties involved in the relevant auctions, and PCAs, must notify us and the EAMPs or the parties involved in the relevant auctions of certain transactions in emission allowances, auction products based on them or derivatives related to them once the total amount of €5,000 has been reached in a calendar year. The notification must be made promptly and no later than 3 business days after the transaction date.
- Level 1: MAR Article 19, Article 56 of European Benchmark Regulation
- Level 2: Delegated Regulation 2016/522, Implementing Regulation 2016/523
- Level 3: ESMA Q&As
- FCA Handbook: DTR 3.1
Persons producing or providing investment recommendations must ensure information is objectively presented, and disclose any conflicts of interest.
- Level 1: MAR Article 20
- Level 2: Delegated Regulation 2016/958
- Level 3: ESMA Q&As
- FCA Handbook: COBS 12.4
MAR places requirements on regulators and firms to be able to receive whistleblowing notifications related to suspected market abuse.
In CP16/19 we proposed that there should be a ‘single home’ in SYSC 18 regarding whistleblowing obligations. Recognising that each piece of EU legislation had its own whistleblowing requirements with slight variations, it was also proposed that each whistleblowing requirement should be signposted in this ‘single home’ in SYSC 18.
Find out more about whistleblowing.
Key policy and consultation documents
Here are some key FCA, ESMA and European Commission policy and consultation documents that give more information on rules relating to market abuse:
- FCA: PS16/18: Changes to the Decision Procedure and Penalties manual and the Enforcement Guide for the implementation of the Market Abuse Regulation (June 2016)
- FCA: PS 16/13: Implementation of the Market Abuse Regulation (April 2016)
- FCA: CP 16/38: Proposed changes to DTR 2.5 on delay in disclosure of inside information (November 2016)
- FCA: CP 16/13: Changes to the Decision Procedure and Penalties Manual and the Enforcement Guide for the implementation of the Market Abuse Regulation (April 2016)
- European Commission: various MAR technical standards (February/March 2016)
- ESMA: consultation on MAR guidelines regarding market soundings and delayed disclosure of inside information (January 2016)
- European Commission: implementing directive on whistleblowing (December 2015)
- FCA: CP 15/38: Provisions to delay disclosure of inside information within the FCA’s Disclosure and Transparency Rules (November 2015)
- FCA: CP15/35: consultation on changes related to the implementation of the Market Abuse Regulation (2014/596/EU) (November 2015)
- ESMA: draft technical standards submitted to the European Commission (September 2015)
- European Commission: Market Abuse Regulation (July 2014)
Other important documents include:
- Corrigenda MAR Article 3(26): definition of ‘person closely associated’
- Benchmark Regulation 2016/1011: reference is made to MAR in articles 9, 14, 16, 41, 55 and 56
- Corrigenda MAR level 2 (Commission Delegated Regulation (EU) 2016/958) article 6.1: investment recommendations