ESMA review of the Market Abuse Regime

ESMA published its review of the Market Abuse Regime.  The report's recommendations will feed into the European Commission's review of MAR. The report concludes that overall MAR has worked well in practice and is fit for purpose. The report includes a significant number of proposals for specific amendments and clarifications rather than a major overhaul of the legislative framework.

In relation to collective investment undertakings, here is a summary of points made in the ESMA MAR review:

• Collective Investment Undertakings (CIUs) admitted to trading or traded on a trading venue are issuers and there are no compelling arguments to exempt them from the scope of MA
   
•  MAR should be amended so that notifications of transactions of PDMRs and those closely associated will no longer be a requirement for any type of listed CIUs
   
• Management companies of CIUs without legal personality are responsible for disclosing inside information where it arises  and MAR should be amended so that management companies of externally managed CIUs are similarly responsible
   
• The definition of inside information is to be amended to include categories of persons, other than persons responsible for executing orders, who may be aware of a future relevant order, such as directors of an issuer, institutional investors, etc
   
• ESMA's Q&A on MAR includes a non-exhaustive list of examples of where inside information might arise for listed CIUs
   
• MAR should be amended to clarify that one contact natural person for each external service provider may be included in the issuer's insider list when the external service providers are legal persons
   
• ESMA recommends including a recital in MAR to clarify that the management company of a listed CIU should be responsible for drawing up and maintaining the insider list of the issuer
   
• where the management company has delegated the execution of certain functions related to a listed to third party entities, such as asset managers, depositaries, accountants, etc., these third party entities, should be explicitly captured by the obligation to draw up and maintain their own insider lists
   
• while MAR allows permanent insider lists, event insider lists should also be drawn up

The current requirements under MAR remain in place until the legislation is amended to take into account any recommendations by ESMA.