EU Market Abuse Regulation Now In Force: Firms Based Outside Of The EU Should Take Note Of Its Extraterritorial Reach.
Legal News & Analysis - Asia Pacific - Regulatory & Compliance
18 July, 2016
On 3 July 2016, the EU Market Abuse Regulation (596/2014) (MAR) came into force, and replaced the EU Market Abuse Directive (2003/6/EC) and the existing UK regimes for market abuse and inside information.
MAR creates a single EU-wide regime of requirements and offences relating to market abuse and the control and disclosure of inside information. The regime captures behaviour anywhere in the world in relation to financial instruments traded on any EU trading venue. It also covers financial instruments which are not traded in the EU, but whose price or value depends on (or has an effect on) the price or value of a financial instrument which is traded in the EU. Market participants must comply with MAR regardless of whether they are located in, or authorised by, an EU member state.
Firms based outside of the EU should ensure that MAR is taken into account if a matter falls within its scope, for example:
- when any of the parties to a transaction is an issuer within the scope of MAR;
- when a transaction includes inside information in relation to any financial instrument within the scope of MAR; or
- when a transaction involves any dealing in a financial instrument within the scope of MAR.
- MAR may also have a knock-on effect outside of the EU, where international firms with operations in the EU see fit to roll out MAR-compliant policies globally.
To assist you in navigating the requirements under MAR, we have prepared a key facts sheet summarising the provisions, which can be accessed here. We are happy to assist you with any issues or questions which may arise.
For further information, please contact:
Will Hallatt, Partner, Herbert Smith Freehills