AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

MAD / MAR

Directive 2003/6/EC on insider dealing and market manipulation (MAD) was adopted by the European Parliament and Council of the European Union on 28 January 2003, with Members States required to implement its provisions by 12 October 2004. Further details are contained within the relevant Level II implementing directives and regulation.

Until MAD, only insider dealing was covered by EU harmonised rules. MAD built upon these existing rules by introducing a common EU legal framework to combat both insider dealing and market manipulation and ensure appropriate administrative sanctions are applied when the rules are breached. It also established a common framework for the disclosure of information to the market.

Level 1

On 20 October 2011, the European Commission adopted proposals for (i) a revised Directive dealing with criminal sanctions against market abuse (MADII) and (ii) a new Regulation dealing with administrative measures against such abuse (MAR). The two proposals sought to:

  • extend the scope of the current market abuse regime to cover financial instruments traded on new categories of platform and OTC;
  • more closely align the way in which market abuse rules apply to commodity derivative and underlying spot markets (in particular, the application of inside information and insider dealing rules to commodity derivative markets and market manipulation rules to both spot commodity and commodity derivative markets);
  • include improper activities relating to benchmarks within the scope of market manipulation;
  • introduce offences of attempted insider dealing and market manipulation;
  • ensure national competent authorities have a minimum set of investigative and enforcement powers, including the power to enter private premises, seize documents and access telephone records; and
  • establish a harmonised regime of minimum criminal and administrative sanctions across the EU Member States.

The European Parliament and Council voted through their versions of the Commission's MAR proposals on 8 October 2012 and 5 December 2012, respectively. Trialogue negotiations between all three EU legislative institutions commenced subsequently on 2 January 2013, with a political agreement for a Level 1 MAR text being reached on 20 June 2013. The European Parliament and Council approved their respective MADII texts on 8 October 2012 and 12 December 2012. A Trialogue agreement on a Level 1 MADII text was reached on 19 December 2013.

The Level 1 Texts of MAR and MADII were published in the Official Journal of the European Union on 12 June 2014. Each will enter into effect on 3 July 2016.

 

Level 2

In November 2013, ESMA published a discussion paper on its policy orientations on possible Level 2 implementing measures for MAR. AIMA submitted a response. On 15 July 2014, ESMA published two consultation papes on MAR Level 2 measures: one covering draft regulatory technical standards and the other draft technical advice to the European Commission on possible delegated acts. The deadline for comments is 15 October 2014.

 


Key legislative documents

MAD

LEVEL I

Directive 2003/6/EC

LEVEL II

Directive 2004/72/EC

Regulation No. 2273/2003

Directive 2003/124/EC

Directive 2003/125/EC

MAD II / MAR

MAR

Regulation (EU) No 596/2014 on market abuse (June 2014)

MADII

Directive 2014/57/EU on criminal sanctions for market abuse (June 2014)

 


 

Relevant consultations

ESMA Consultation Paper on draft technical advice for possible delegated acts under MAR (July 2014)

ESMA Consultation Paper on draft RTS under MAR (July 2014)

Discussion Paper on ESMA’s policy orientations on possible implementing measures under the Market Abuse Regulation (November 2013)

European Commission Impact Assessment MAD II (October 2011)

European Commission Public Consultation: A Revision of the Market Abuse Directive (June 2010)

Call for Evidence – Review of Directive 2003/6/EC on insider dealing and market manipulation (Market Abuse Directive) (April 2009)


AIMA documents

AIMA Response to ESMA's consultation paper - policy orientations on possible implementing measures under the Market Abuse Regulation (January 2014)

AIMA Summary of the Market Abuse Regulation Trialogue Position (September 2013)

AIMA Note on the progress of the European Commission's draft proposal for a regulation on insider dealing and market manipulation - MAR (March 2013)

AIMA Comparison of the European Commission's proposal for a Market Abuse Regulation (January 2013)

AIMA Position Paper (February 2012)

AIMA Response to the European Commission’s Public Consultation on a Revision of the Market Abuse Directive (July 2010)

AIMA Response to the Call For Evidence Review of Directive 2003/6/EC on insider dealing and market manipulation (Market Abuse Directive) (June 2009)


Other resources

AIMA Noticeboard

 

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      6. Shareholder Rights Directive
      7. European Long Term Investment Fund Regulation
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      10. AIFMD-Related Events
    2. US Hedge Fund Adviser Regulations
      1. Registration and Reporting
      2. Incentive-Based Compensation
      3. JOBS Act
    3. Asia Pacific Asset Management regulation
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    5. Systemically Important Financial Institutions ('SIFIs')
    6. Remuneration
      1. UK
      2. United States
      3. CRD IV and CRR
      4. AIFMD
      5. MiFID
    7. Shadow Banking
    8. Volcker Rule
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      5. IOSCO
      6. Germany
      7. CFTC Automated Trading
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    3. Base Erosion - Profit Shifting (BEPS)
    4. FAIFs and FINROFs
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