Market abuse – A pan‐European approach
| Pages | 306-314 |
| DOI | https://doi.org/10.1108/13581980410810858 |
| Date | 01 December 2004 |
| Published date | 01 December 2004 |
| Author | Carmen Reynolds,Mathew Rutter |
| Subject Matter | Accounting & finance |
Market abuse — A pan-European approach
Carmen Reynolds and Mathew Rutter
Received: 2nd May, 2004
Norton Rose, Kempson House, Camomile Street, London, EC3A 7AN, UK; tel: +44 (0)20 7283 6000;
fax: +44 (0)20 7283 6500; e-mail: carmen.reynolds@nortonrose.com
Carmen Reynolds is head of the Norton
Rose advisory and transactional financial
services group. She provides regulatory
and commercial advice to a range of
financial institutions including banks,
broker-dealers, corporate finance advisers
and fund managers.
Mathew Rutter is a member of the Norton
Rose financial services group, and advises
on a wide range of regulatory issues.
ABSTRACT:
Keywords: market abuse, insider dealing,
financial services
This paper looks at the aims and objectives
behind the Market Abuse Directive, looking at
some of its main features, and considers some of
the changes that are expected to be made to the
existing UK regime.
The Market Abuse Directive (MAD)
1
forms a central pillar of the Financial Ser-
vices Action Plan (FSAP) adopted by the
European Commission in 1999. MAD will
create, for the first time at a European
level, a framework in relation to insider
dealing and market manipulation that will
operate across Europe’s major financial
markets.
This single framework aims to simplify
administration and reduce the number of
different rules across the member states. The
need for an alignment across member states
of a policy on market abuse has been evi-
dent for some time. Andrew Procter, Direc-
tor of Enforcement at the UK Financial
Services Authority (FSA), has commented
that the FSA receives about 400 requests
each year from regulators elsewhere in the
EU for assistance in their enforcement cases,
and most relate to suspected market miscon-
duct. One of the objectives behind MAD is
the facilitation of enforcement across
member states, with a view to fulfilling the
FSAP aim of enhanced market integrity in
member states.
MAD is also the first Directive under
which level 2 measures have been adopted,
through a consultation process involving
representatives from a number of the
member states. These level 2 provisions
add flesh to the bones of the framework
created by MAD.
The deadline for implementation of
MAD was 12th October, 2004. It is, how-
ever, unlikely that many member states
will meet it, although Italy and Greece are
reported to have done so already. In the
UK, the Treasury and FSA hope to finalise
their new provisions by the end of
November 2004. Firms will then have
three months before the new rules come
into effect, so it seems unlikely that the
new regime will come into effect in the
UK before March 2005.
WHY IS MAD REQUIRED?
While the UK already has a comparatively
sophisticated market abuse regime, mean-
ing that the Directive will require less of a
change to existing laws and practices, for
Page 306
Journal of Financial Regulation and Compliance Volume 12 Number 4
Journal of Financial Regulation
and Compliance, Vol. 12, No. 4,
2004, pp. 306–314
Henry Stewart Publications,
1358–1988
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