On 15 May 2019, the European Commission (Commission) published a letter (dated 20 March 2019) that it sent to the European Securities and Markets Authority (ESMA) regarding technical advice on the report to be submitted by the Commission under Article 38 of the Market Abuse Regulation (MAR).
Under Article 38 of MAR, the Commission is required to submit a report to the European Parliament and to the Council on, firstly, the application of MAR and, secondly, the level of thresholds set out in its Article 19(1a)(a) and (b) in relation to managers’ transactions in certain specific circumstances. The Commission will rely on this report as a basis for any legislative action it deems appropriate.
Specifically, the Commission seeks guidance on:
- mandatory elements of the report: including, the scope of application of the benchmark provisions; the scope of the definition of inside information; and the appropriateness of introducing common rules on the need for all Member States to provide for administrative sanctions for insider dealing and market manipulation; and
- non-mandatory elements of the report: including, whether spot FX contracts should be covered by MAR; the scope of reporting obligations under the exemption for buyback programmes; and the adequacy of the requirement to notify managers’ transactions as applied to collective investment undertakings.
ESMA is encouraged to consult with market participants to produce advice in response to the Commission’s letter. The deadline for ESMA’s response to the Commission’s queries is 13 December 2019, in light of the fact that the procedures to be followed for the adoption of the report are potentially lengthy.