(This note is not part of the Regulations)
These Regulations give effect to Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ No L 173, 14.04.2014, p31) (“MAR”).
Part 1 of these Regulations deals with miscellaneous matters in respect of MAR. The Financial Conduct Authority (“the FCA”) is designated as the UK's competent authority for the purposes of MAR. Part 1 describes how applications or notifications to the FCA under MAR are to be made and when explanations for delaying public disclosure of inside information must be provided to the FCA for the purposes of MAR. Part 1 (in conjunction with the Schedule to the Regulations) also implements Commission Implementing Directive (EU) 2015/2392 of 17 December 2015 on Regulation (EU) No 596/2014 of the European Parliament and of the Council as regards reporting to competent authorities of actual or potential infringements of that Regulation (OJ No L 332, 18.12.2015, p126).
Parts 2 and 3 of these Regulations amend UK law to make it compatible with and implement MAR (in particular there are substantial amendments to the UK market abuse regime under Parts 6 and 8 of the Financial Services and Markets Act 2000 (c.8) (“FSMA”). The FCA is given new powers to police MAR, including powers to monitor the financial markets and gather information, require the publication of corrective statements and other information, and to suspend the trading of financial instruments. The FCA is also given enforcement powers in respect of contraventions of MAR, to allow it to impose financial penalties and other administrative sanctions such as prohibitions on trading in financial instruments or working in investment firms. The investigative and disciplinary powers in Parts 11 and 14 of FSMA and the powers relating to injunctions and restitution orders in Part 25 of FSMA are also updated so they apply for the purposes of MAR.
Part 3 of the Regulations also contains amendments to the Recognised Auction Platforms Regulations 2011 (S.I. 2011/2699) (“the 2011 Regulations”) which implemented Commission Regulation (EU) No 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emission allowances trading within the Community (OJ L 302, 18.11.2010, p1) (“the auctioning regulation”). Schedule 1 to the 2011 Regulations, which modified Part 8 FSMA to implement the market abuse regime in the auctioning regulation for emission allowances which are not financial instruments, is replaced. These Regulations recast those modifications so the powers in FSMA which relate to MAR also apply with appropriate modifications for the purposes of the regime under the auctioning regulation. Schedule 1 to the 2011 Regulations will then cease to have effect on 3rd January 2018 when MAR itself will apply to market abuse in relation to all emission allowances on the coming into force of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ No L 173, 12.6.2014, p349).
Part 4 of the regulations requires the Treasury to review of these Regulations every 5 years.
A validation stage impact assessment of the effect that this instrument will have on the costs of business and the voluntary sector is available from Her Majesty's Treasury, 1 Horse Guards Road, London SW1A 2HQ and is annexed to the Explanatory Memorandum which is available alongside the instrument at http://www.legislation.gov.uk.