Background

The Market Abuse Directive 2003/6/EC (MAD) was adopted in 2003 and established a legal framework throughout the EU to protect market integrity against instances of insider dealing and market manipulation.

Following the widespread damage caused by the financial crisis however, a review into the effectiveness of MAD was undertaken which led to the European Commission (Commission) proposing that MAD be repealed and replaced.

As a result, on 12 June 2014 the text of two new legislative tools was published in the Official Journal of the European Union:

1. •

   Regulation (EU) 596/2014 (EU Market Abuse Regulation), and

2. •

   Directive 2014/57/EU on criminal sanctions for market abuse (CSMAD)

Taken together, the EU Market Abuse Regulation and CSMAD replaced MAD and introduced a new market abuse regime across the EU that encompasses a wider range of markets, products and behaviour than was previously provided for.

The EU Market Abuse Regulation and CSMAD became effective on 3 July 2016.

For information on the EU Market Abuse Regulation, see Practice Note: EU Market Abuse Regulation (MAR)—essentials.

Purpose