CESR argues there is a need to review the MAD

10 July 2009

CESR considers that the review of the MAD is a good opportunity to implement into European legislation this recommendation and not only for the futures markets but for any financial instrument subject to the market abuse regime. 

CESR agrees with: 

• the expansion of the scope of MAD beyond regulated markets, and in particular, for including multilateral trading facilities (MTFs)
• the importance that the competent authorities in Member States are able to take effective action against those who abuse markets by misusing information before it has been announced to the market.
• the current definition of market manipulation is good as far as it goes, it also considers that the definition should be extended so that it explicitly includes the attempt to manipulate the market as behaviour subject to the market abuse regime.
• STR regime which has proved a valuable source of market abuse referrals for members.

• In general, it would be acceptable to align the definition of financial instruments in the MAD with that provided for in MiFID and particularly agrees that products such as Credit Default Swaps and Contracts for Difference should be covered under MAD. 
• the extension of the scope of the MAD regime to physical products is not recommended, as it does not reflect the needs of the energy markets, whose features would not justify such a solution.
• the need to proceed carefully if the mechanism for deferred disclosure of inside information were to be revisited and particularly the exemptions to the obligation were to be broadened.

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