ESMA updates Q&A on MAR order cancellation policies

Published: 30 May 2017

ESMA has updated its Q&A document under Regulation (EU) No.596/2014 on market abuse (MAR) to include an additional question and answer on how the use of blanket order cancellation policies by firms upon the receipt of inside information interacts with the MAR definition of insider dealing.

The Q&A appears to be stating that a blanket order cancellation policy does not constitute ‘use’ of inside information, thus is not presumed to be insider dealing for the purposes of the MAR insider dealing definition.

Instead a case-by-case analysis has to be undertaken (presumably by a supervisor when choosing to investigate) to see whether the cancellation was indeed based on the ‘use’ of the information.

This updated Q&A follows an AIMA letter submitted in January 2017 to ESMA and a number of EU national competent authorities, arguing for order cancellation policies to fall outside of the presumption of ‘use’ of inside information.

If members have any questions or comments, please contact Oliver Robinson.