Market Abuse Regulation - Commission publishes Level 2 measures

On 21 December 2015, the European Commission (the Commission) published a Delegated Regulation (the Level 2 Regulation), which sets out a number of Level 2 measures under the Market Abuse Regulation (MAR). At the same time, the Commission published associated Annexes to the Level 2 Regulation.

Level 2 measures now finalised

Together, these documents (which are, in fact, dated 17 December 2015) cover the following issues:

• exclusion from the scope of MAR for certain third countries public bodies and central banks in respect of transactions, orders or behaviour in pursuit of monetary, exchange rate or public debt management policy (under Article 6(5) of MAR)
• specifying the indicators of market manipulation (under Article 12(5) of MAR)
• establishing a minimum threshold of carbon dioxide equivalent and rated thermal input when applying exemption from the obligation to disclose inside information (under Article 17(2) of MAR)
• specifying to which competent authority notifications of delay of publication of inside information should be made (under Article 17(3) of MAR)
• specifying the circumstances under which trading during a closed period may be permitted by the issuer, including what circumstances would be considered exceptional and the types of transactions that would justify being permitted to trade (under Article 19(13) of MAR), and
• specifying types of transactions conducted by the persons discharging managerial responsibilities and persons closely associated with them that would trigger a notification requirement (under Article 19(14) of MAR).

The Commission also published an Implementing Directive, dated 17 December 2015, which deals with arrangements for reporting of infringements under Article 32(5) of MAR.

Level 2 measures still awaited

Various Level 2 measures under MAR are still to be finalised by the Commission.

• Draft measures covering the following issues were included in ESMA’s Final Report published on 28 September 2015 but have not yet been formally adopted by the Commission:
  • notifications and list of financial instruments (under Article 4(4) and 4(5) of MAR)
  • buy-backs and stabilisation: the conditions for buy-back programmes and stabilisation measures (under Article 5(6) of MAR)
  • market soundings (under Article 11(9) and (10) of MAR)
  • accepted market practices (under Article 13(7) of MAR)
  • suspicious transaction and order reporting (under Article 16(5) of MAR
  • technical means for public disclosure of inside information and delays (under Article 17(10) of MAR)
  • insider list (under Article 18(9) of MAR)
  • managers' transactions: format and template for notification and disclosure (under Article 19(15) of MAR), and
  • investment recommendations (under Article 20(3) of MAR).
• In addition, a number of Level 2 measures are awaited (under Articles 22(3), 25(9), 26(1) and 33(5) of MAR) which concern cooperation between the national competent authorities, on which ESMA has not publicly consulted.

Level 3 measures

Finally, the Level 1 text mandates ESMA to develop Level 3 guidelines on:

• a non-exhaustive indicative list of information which is reasonably expected or required to be disclosed in relation to commodity derivatives (under Article 7(5) of MAR)
• market soundings (under Article 11(11) of MAR), and
• delay in the public disclosure of inside information (under Article 17(11) of MAR.

The Level 1 text, however, sets no deadline for these guidelines to be finalised and, to date, ESMA has not publicly consulted on their contents.

For more detail on the MAR legislative process, please see the Simmons & Simmons MAR Legislative Tracker.