On June 30, the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (Regulations) were published in the United Kingdom. The Regulations came into effect on July 3, and make amendments to UK laws in order to implement the EU Market Abuse Regulation (MAR). Under the Regulations:
- The Financial Conduct Authority (FCA) is designated as the UK competent authority for the purposes of MAR and has the power to: (1) require information from issuers and other persons; (2) compel issuers to publish information; (3) suspend trading in financial instruments; and (4) apply penalties, prohibitions and suspensions for breaches to MAR.
- Individual liability in respect of legal persons under Articles 8 (Insider Dealing) and 12 (Market Manipulation) of MAR is clarified to be imposed for an individual participates in the decisions of a corporate body when: (1) the individual is an officer of the corporate body at the time the decision was made; and (2) the FCA is satisfied the individual was knowingly concerned in the decision. Officers include directors, members of management committees, chief executives and individuals who are controllers of the corporate body.
Other changes include measures to amend provisions implementing the previous market abuse regime under the EU Market Abuse Directive, among others.
The explanatory memorandum published alongside the Regulations notes the short timeframe between the Regulations being presented to Parliament on June 29 and their commencement on July 3. The explanatory memorandum states that it was deemed inappropriate to publish the Regulations during the period of purdah prior to the UK referendum on whether to remain part of the European Union.
As noted in the Corporate & Financial Weekly Digest edition of June 24, despite the United Kingdom voting to leave the European Union, the UK’s financial services regime, which includes recent EU laws such as MAR, will remain in place until further notice, with further clarity unlikely until a post-exit model and relationship has been agreed between the United Kingdom and the European Union.