There have been many developments in national and European financial markets regulation during the past month. Among other things, the Market Abuse Regulation and several of its implementing regulations now apply. In this article we provide a brief overview of this and other developments.
New Market Abuse Regime
The Market Abuse Regulation (MAR) and the Market Abuse Directive (MAD) now apply. The Dutch bill implementing the MAR and the MAD was adopted by the First Chamber of Parliament on 12 July 2016 and will enter into force shortly.. But as the AFM has already been designated the competent authority for the purposes of the MAR, it currently has the power to impose fines and penalties for infringement of the MAR.
Under the new regime, the main rule remains unchanged: if a listed company has inside information directly concerning the company, it should in principle make this information public immediately. The prohibition of market manipulation has not changed either. There are, however, amendments to the scope of the rules, the fines that can be imposed for infringement, and the powers of the AFM.
As it is a regulation, the MAR has direct effect. Therefore, several market abuse provisions have been removed from the Dutch Financial Markets Supervision Act (Wft). This includes the requirement to disclose inside information, which is now set out in article 17 of the regulation. It states that an issuer who has delayed disclosure of information to the public must inform the competent authority immediately after the information is disclosed to the public. Issuers must also keep a record of the date and time when the inside information first existed, the time when the decision to delay was taken, who was responsible for the decision, and evidence of fulfilment of each of the conditions for delay. This information is to be provided to the AFM on its request.
Finally, a press release which contains inside information must contain a statement identifying that the information in the announcement is inside information.
The maximum fine for serious infringements has been raised from EUR 4 million to EUR 5 million and, as a result, the maximum fine for repeat infringements is now EUR 10 million. A fine of up to 10% of net annual turnover has been introduced for large enterprises. This maximum fine can be raised to EUR 20 million or (for large enterprises) 15% of net annual turnover. The Dutch Decree on Administrative Fines in the Financial Sector will be updated to reflect these changes.
The scope of the market abuse rules will be extended to:
Powers of the AFM
The AFM already had most of the powers granted by the regulation, but some powers have been amended. Among other things, the regulation grants supervisors more powers to disqualify a person discharging managerial responsibilities within an investment firm or any other natural person who is held responsible for an infringement, from exercising certain functions. This is included in article 1:87 of the Dutch Financial Markets Supervision Act (Wft).
Under the regulation, the AFM has more possibilities to suspend trade. This proposal will be implemented in the bill implementing MiFID 2014.
Finally, the AFM can temporarily disqualify a person discharging managerial responsibilities within an investment firm or another natural person who is held responsible for the infringement, from dealing on own account. This ban can be imposed for no more than one year, and can be extended by one year.
Overview of the MAR implementing regulations
In the last few months, a large number of delegated regulations and implementing regulations of the Market Abuse Regulation have been published. They all have direct effect and supplement various articles of the MAR. Currently the following delegated regulations are in effect:
The AFM has published the following brochures (in Dutch):
Consultation draft bill on transparency in financial markets supervision
The Minister of Finance has launched a consultation on a draft bill introducing new powers of the AFM and DNB. The following measures are proposed:
Disclosure of inside information by emission allowance market participants
ESMA has published an opinion on the disclosure of inside information by issuers of financial instruments and emission allowance market participants. ESMA does not agree with the amendments proposed by the European Commission in ESMA’s draft Implementing Technical Standards. ESMA considers that the two requirements that the Commission is intending to eliminate (the marking and dissemination of inside information) while reducing slightly the costs of the disclosing companies, would put investors at a disadvantage. ESMA believes that EAMPS should meet the requirements of both the Regulation on Energy Markets Integrity and Transparency and the Market Abuse Regulation.
Council of the EU
Official Journal EU
10 July 2020
7 July 2020
15 June 2020
12 June 2020
27 May 2020
22 May 2020
19 May 2020
19 May 2020
19 May 2020
19 May 2020
De Brauw Blackstone Westbroek
Claude Debussylaan 80
1082 MD Amsterdam
P.O. Box 75084
1070 AB Amsterdam