EU Report on Accepted Market Practices Under the Market Abuse Regulation
The European Securities and Markets Authority has published an annual report to the European Commission on the application of accepted market practices under the Market Abuse Regulation. The Market Abuse Regulation provides certain prohibitions against market manipulation. Accepted market practices, which are established by national regulators and notified to ESMA, provide a defense against any allegations of market manipulation. In particular, a dealing on a financial market which was carried out for legitimate reasons and in line with an established AMP, will not be found to constitute market manipulation. In the report, ESMA identifies AMPs which were established before the Market Abuse Regulation came into force, or which became effective after that date for the period of July 2018 to June 2019 and describes the latest status of the AMPs. The latest status of the AMPs is the following:
The Spanish Comisión Nacional del Mercado de Valores (CNMV) AMP on liquidity contracts remains in force (ESMA approved in December 2016 on the basis that the AMP includes mechanisms to limit the threat to market confidence). In September 2019, ESMA issued a positive opinion on the proposed revisions to the AMP.
The Portuguese Comissão do mercado de valores mobiliários (CMVM) AMP on liquidity contracts remains in effect.
The French Autorité des marchés financiers (AMF) established an AMP on liquidity contracts for shares that came into effect on January 1, 2019. ESMA has not approved the AMP on liquidity contracts for shares. ESMA’s previous annual report noted that the AMP differs from the ESMA Points of Convergence for AMPs in respect of price, volume, transparency and resources.
The Italian Commissione Nazionale per le Società e la Borsa (CONSOB) established three AMPs under the earlier Market Abuse Directive regime, namely the AMP on liquidity contracts (CONSOB AMP No 1), the AMP on purchase of own shares to set up a shares warehouse position (CONSOB AMP No 2) and an AMP on buyback of bonds issued at predetermined conditions (CONSOB AMP No 3). CONSOB has consulted on revisions to the AMPs and has requested that ESMA issue an opinion of the revised AMP No 1, which ESMA is in the process of assessing. AMP No’s 2 and 3 were withdrawn by the CONSOB on June 30, 2019. However, due to industry concerns about the discontinuation of the AMPs, the CONSOB is analyzing whether to reinstate the AMPs or take other action, in particular to ensure that industry could undertake buy-back programs with a reduced risk of committing market manipulation.