CESR starts work on implementing measures on Market Abuse and Prospectuses

27 March 2002



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The European Commission has asked the Committee of European Securities Regulators (CESR) to start work now on technical advice on Market Abuse and Prospectuses. The CESR's advice will be considered by the Commission in preparing possible future measures implementing the proposed Directives on the two areas concerned. This is the Commission's first request to the CESR for technical advice.

On the Prospectuses Directive the Commission requested CESR to provide technical advice on possible disclosure requirements based on the basic structure and typical main features of different types of securities (“building block approach”) involving at least the following types of transferable securities:

  • a) Shares: shares in companies and other securities equivalent to shares in companies which are negotiable on a regulated market;
  • b) Bonds: bonds and other forms of securitized debt which are negotiable on a regulated market;
  • c) Any other securities normally dealt in giving the right to acquire transferable securities under a) and b) by subscription or exchange or giving rise to cash settlement, excluding instruments of payment.

    This advice should be provided by 31 March 2003 at the latest. This list may need to be amended as discussions evolve in Council and Parliament. See CESR Document

    On the Market Abuse Directive the Commission requested CESR to provide technical advice on possible draft implementing measures on the definitions of ‘Inside Information’, ‘Market Manipulation’ and ‘Financial Instrument’:

    The possible draft implementing measures should take account:
    with regard to Inside information

  • factors which need to be taken into account in deciding whether and when a piece of information is of a precise nature;
  • factors which need to be taken into account in deciding whether a piece of information relates to one or more issuers of financial instruments or to one or more financial instruments;
  • factors which need to be taken into account in deciding whether and when a piece of information would be likely to have a significant effect on the price of those financial instruments;
  • factors which need to be taken into account in deciding which related derivative financial instruments should be covered by the definition.

    with regard to Market Manipulation

  • factors which need to be taken into account in deciding whether and when a transaction or an order to trade gives or is likely to give false or misleading signals as to the supply, demand or price of financial instruments;
  • factors which need to be taken into account in deciding whether and when a transaction or an order to trade secures the price of one or several financial instruments at an abnormal or artificial level;
  • factors which need to be taken into account in deciding whether and when a transaction or an order to trade employs fictitious devices or any other form of deception or contrivance.

    with regard to Financial Instrument
    The possible draft implementing measures should specify which existing products would fall within the list of financial instruments.

    CESR is requested to provide advice by the 31 December 2002 at the latest. See CESR Document

    The 'Lamfalussy Report' set out a new four-level approach to European securities regulation, composed of essential principles, implementing measures, co-operation and enforcement, and called for the creation of two new Committees: the European Securities Committee (ESC) and the Committee of European Securities Regulators (CESR). It recommended that the CESR play a key role in the technical preparation of these implementing measures.

    For this reason, the Commission has now asked the CESR to start preparing technical advice. These requests do not yet represent formal mandates for technical advice on all implementing measures. The Commission will only issue such mandates once the two Directives have finally been adopted. The requests are therefore restricted to key priorities for which it is evident at this stage that work is necessary.

    See provisional Request for Technical Advice on Possible Implementing Measures on the future Directive on Prospectuses.

    See provisional Request for Technical Advice on Possible Implementing Measures on the future Directive on Market Abuse.

    See CESR press release

    © European Commission