08 October 2019

ESMA adopts MAR standards on supervisory cooperation

ESMA’s RTS cover cooperation arrangements between national competent authorities and their counterparts in third-countries for the purpose of efficiently exchanging information and enforcing the obligations related to market abuse.

Market abuse can take many forms and concern different markets at the same time. As markets’ integration further increases, smooth cooperation between authorities, entities and public bodies is paramount in order to identify and deter abusive behaviour.

ESMA has submitted these RTS for endorsement to the European Commission. Once fully implemented, these RTS will form part of the single rulebook for EU securities markets.

Article 26 of MAR states that competent authorities should conclude cooperation arrange-ments with their counterparts of third countries for the purpose of efficiently exchanging infor-mation and enforcing the obligations arising from MAR in third countries. Article 26 of MAR also specifies that such cooperation arrangements are to be concluded where necessary.

Furthermore, a competent authority proposing to enter into such cooperation arrangements with a third-country supervisory authority should inform ESMA and its European counterparts with a view for ESMA to potentially play a role of facilitation and coordination of the develop-ment of such arrangements.

The international community of securities regulators looks back on a long experience of coop-eration in the realm of market abuse that goes back decades. And, unlike in other areas of financial regulation (e.g. AIFMD), it has been developing over time instruments to ensure an efficient cooperation among them. ESMA acknowledges the existence of a multilateral instru-ment for cooperation and exchange of information developed by the International Organisation of Securities Commissions (IOSCO) for the purpose of regulatory enforcement regarding se-curities markets. Competent authorities of the Member States of the European Union are all signatories to the Multilateral Memorandum of Understanding of IOSCO (IOSCO MMoU) which covers in particular the cooperation and exchange of information in the context of market abuse.

These internationally recognised arrangements are based on robust international standards. They have been used for many years already and proven helpful to ensure an efficient coop-eration with third country supervisory authorities. Besides, these arrangements are widely ac-cepted throughout the community of securities regulators.

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