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Market Abuse Directive: CESR publishes new work programme

July 30th, 2007

The Committee on European Securities Regulators (CESR) has published its second work programme for further work in the area of the Market Abuse Directive. First set was published in May 2005.

The programme encompasses issues where CESR identifies a need for further consideration and, therefore, further guidance to its members and to the market.

“The issues included in this work programme have been flagged by market participants during the Call for Evidence, which CESR had launched in 2006,” according to CESR.

“This had taken place following two years of CESR experience with the new market abuse regime in operation in Europe and the consultation for the second set of guidance on the Operation of the Market Abuse Directive.”

The issues identified included: Assistance to the European Commission in developing the list of sanctions and measures applicable under the MAD, in order to accommodate concerns about the diversity of measures and sanctions applied in Member States.

Harmonisation of requirements for insiders’ lists, suspicious Transactions Reporting, on not only to which authority the reports are submitted, but also further work to establish whether CESR can produce further guidance on expectations as regards reporting.

Stabilisation Regime as Level 3 -the strict objectives and limits of the Regulation and the diverging application by supervisors of the Regulation in relation to Accepted Market Practices (AMPs) do not provide sufficient legal certainty.

The two-fold notion of inside information will be considered further.

This includes the definition of insider information delay of public disclosure; concerns about the problems arising from having one definition of inside information for both the insider trading prohibition and the issuer disclosure obligations; and also, the question of the requirement not to mislead the public in the case of a delay of public disclosure.

A mapping of the existing thresholds in Member States and other practices of CESR Members will be undertaken.

This will include, for example, stock options programmes; who is entitled to publish directors’ dealings; notifications of transactions by persons discharging managerial responsibilities and consideration of whether there is a case for recommending adjustment of the threshold.

Develop guidance on the definition of inside information with regard to commodity derivatives to the extent possible.

As indicated in these areas, CESR will seek to develop guidelines for CESR Members and the markets, however, where appropriate, CESR will consider whether in any cases it is appropriate to propose that the European Commission examines an issue in its forthcoming review of the operations of the Directive.

If it is a decision proposed for CESR to issue specific guidance to the market, this will be developed following CESR’s consultation process.

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