EU MAR

An EU wide framework for tackling market abuse and market manipulation was first introduced in 2005. Since then the financial markets have seen the creation of new forms of financial instruments and the emergence of new trading platforms and venues. Coupled with a poor track record for the prevention and enforcement of market abuse in some member states, in 2011 the European Commission began consultation on a proposal for a Regulation on insider dealing and market manipulation (MAR) and a Directive on criminal sanctions for insider dealing and market manipulation (CSMAD) to update and strengthen the market abuse framework established back in 2005. The new regime introduced by MAR and CSMAD came into effect on 3 July 2016.

The key changes introduced by MAR include:

• extending the market abuse regime to apply not only to financial instruments admitted to trading on a regulated market but to financial instruments on other trading platforms such as multilateral trading facilities and organised trading facilities and related financial instruments;
• extending the market abuse rules to cover EU emissions allowances;
• bringing the manipulation of benchmarks expressly within the market manipulation offence;
• the introduction of a new offence of attempted market manipulation;
• the introduction of a specific format for insider lists;
• a new requirement to notify the regulator on announcement of inside information where the issuer has delayed the announcement of that information;
• the introduction of a specific regime for the disclosure of inside information in the course of market soundings; and
• the extension of the Suspicious Transaction Reporting (STR) regime to cover suspicious orders. 

UK Market Abuse Regime

The UK market abuse regime is split broadly into:

• a civil regime under the UK version of the Market Abuse Regulation (UK MAR), which was onshored into UK law at the end of the Brexit transition period on 31 December 2020; and
• a criminal regime under Part V of the Criminal Justice Act 1993 and Part VII of the Financial Services Act 2012.

The substantive provisions of UK MAR remain very similar to those of EU MAR. However, there are some differences (in addition to the different jurisdictional scope of the regimes) arising from onshoring changes made under the European Union (Withdrawal) Act 2018. Future changes in the EU and/or UK market abuse regimes may also lead to divergence.