Brexit—government publishes approach papers relating to changes to market abuse regime and the Prospectus and Transparency Directives

Brexit—government publishes approach papers relating to changes to market abuse regime and the Prospectus and Transparency Directives

The government has published two approach papers relating to the proposed amendments to be made to retained EU law relating to market abuse and the Prospectus, Transparency and Consolidated Admissions and Reporting Directives to ensure that they continue to operate effectively after the UK leaves the EU. Draft statutory instruments (SIs) have not yet been published but the approach papers set out the policy background and purpose of the proposed SIs.

Draft Market Abuse (Amendment) (EU Exit) Regulations 2018—explanatory information

This SI will address deficiencies in retained EU law relating to the market abuse regime. The proposals include:

• maintaining the scope of the Market Abuse Regulation—the UK market abuse regime will cover conduct related to instruments admitted to trading or traded on both UK and EU venues. It is intended that in a no-deal scenario, the FCA will maintain the ability to prohibit, investigate and pursue cases of market abuse which affect UK markets and their reputation

• transaction reporting—the transaction reporting regime in the Markets in Financial Instruments Directive (MiFID II) provides for the collection of data used to identify possible instances of market abuse and the Market Abuse Regulation provides for its investigation and enforcement. The government intends that the existing scope of the FCA’s monitoring of markets will be maintained (also dealt with in the draft Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018)

• notification requirements will be retained—the UK market abuse regime will keep the Market Abuse Regulation’s notification requirement for issuers to report certain information to the relevant national competent authorities. This includes obligations to report transactions by persons discharging managerial responsibilities, any delay in disclosing inside information and to provide, on request, insider lists

• transfer of ESMA’s functions—the powers and functions of the European Securities and Markets Authority will be transferred to the FCA to enable it to take enforcement action under the Market Abuse Regulation

• supervisory cooperation—it will not be appropriate for UK supervisors to be obliged to share information or cooperate unilaterally with EU authorities without reciprocity. References in legislation to cooperation and information sharing will be removed. However, UK supervisors will still be able to share information with EU authorities where

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