In October 2011, the European Commission published proposals for a regulation on insider dealing, market manipulation and the improper disclosure of inside information. The resulting Market Abuse Regulation (MAR) was adopted and published in its final form in June 2014. MAR updates the civil market abuse framework formerly established by the EU Market Abuse Directive (MAD) and will apply from 3 July 2016. As an EU Regulation, MAR is directly applicable in the UK without the need for any domestic implementing legislation.
Impact on FCA Handbook
The FCA Handbook is a key element of the current UK market abuse regime under the Financial Services and Markets Act 2000 (FSMA). The FCA Handbook contains various provisions which will be replaced by, or may conflict with, the directly effective provisions in MAR.
Due to the changes related to the implementation of MAR, the FCA released a consultation paper on 5 November 2015, inviting interested parties to provide feedback on the proposed changes: http://www.fca.org.uk/news/cp15-35-implementing-market-abuse-regulation
Summary of Changes
The FCA consultation focuses on the following proposals:
As the Model Code is partially incompatible with MAR (MAR does not contain a clearance to trade procedure), the FCA propose to provide guidance to firms on developing processes to allow PDMRs to apply for clearance to deal.
To remove the Disclosure Rules and replace them with signposts to MAR to be renamed as ‘Disclosure Guidance’.
To change the content and legal status of The Code of Market Conduct.
To retain the power to give guidance and clarification on market abuse as the UK’s competent authority.
To contribute to the consultation, you may respond to the questions in Annex 3 of the consultation paper by 4 February 2016 using the FCA’s online form.