Stepping up the Fight Against Market Abuse: Challenges in a Complex Financial Marketplace

Published in: 

“The best way for the EU to proceed in the face of market abuse is not to wait for the US to finish the given investigation and then ask for extradition.” This was the advice given to EU competition authorities by MEP Arlene McCarthy at an ECMI seminar on January 23rd. Accordingly, the EU is equipping itself with the tools to combat market abuse and manipulation by raising the bar on principles and sanctions. However, listed companies are wary that the proposed legislation does not offer sufficient legal certainty, including on the definition of insider information, and could deter listings given the administrative burden for SMEs – as argued by Carmine Di Noia, Deputy Director General at ASSONIME. In extending the market abuse regime to derivatives markets, Thomas Erickson of the Commodity Markets Council cautioned against following the same approach as for equities. In order to differentiate hedging from other operations, firms should be asked to disclose their ‘physical position’ to the supervisor.