Market Abuse Regulation

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:

  1. 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
  2. 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
  3. financial instruments traded on an organised trading facility (OTF)
  4. 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

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’:

ESMA Guidelines

These sets of guidelines are mandated under MAR:

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 will have to comply with the following obligations from January 2018:

  • disclose inside information relating to emission allowances: MAR Article 7 
  • maintain an insider list: MAR Article 17
  • notify us of PDMRs transactions on emission allowances and auction products based on these: MAR Article 19

Market abuse offences

Inside information  

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.

Further information:

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.

Further information:

  • Level 1: MAR Article 8, MAR Article 9, MAR Article 10, MAR Article 14
  • FCA Handbook: MAR 1.3, MAR 1.4

Market soundings

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.

Further information:

Market manipulation

MAR defines and prohibits market manipulation. This offence has been extended to capture attempted manipulation, benchmarks and in some situations spot commodity contracts.

Further information:

Exemptions

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.

Further information:

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.

Further information:

Disclosures

Disclosure and delaying disclosure of inside information

Issuers 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 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.

See the delay disclosure notification form and a guide to completing it.

Further information:

Insider lists

MAR places an obligation on issuers 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.

Further information:

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.

Further information:

Managers’ transactions

Persons discharging managerial responsibilities within issuers (PDMRs), and persons closely associated with them, must 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 are also prohibited from conducting certain personal transactions during a closed period.

See the PDMR notification form and a guide to completing it.

Further information:

Investment recommendations

Persons producing or providing investment recommendations must ensure information is objectively presented, and disclose any conflicts of interest.

Further information:

Whistleblowing

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.

Further information:

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:

Other important documents include: