FESE responded to the EC Consultation on the Market Abuse Directive review
27 July 2010
FESE members believe that the requirements of the MAD review related to disclosure of inside information, directors’ dealings and insider lists should not apply to financial instruments when they are admitted to trading on a MTF.
FESE believes that the revision of MAD can be very constructive in bringing the MAD rules in line with current trading environment. In particular, it recommends the following improvements:
· All enforcement type (and any remaining minor legal) differences between the surveillance done by RMs and MTFs trading instruments admitted to trading on a RM should be eliminated. In most cases, this is a matter of better enforcement only.
· There needs to be a level playing field and cooperation across all execution venues with potentially Level 3 definitions covering issues such as alerts, data standards, and information sharing.
· There should be independent scrutiny of broker/MTF matching algorithms/engines in order to avoid/mitigate so mentioned potential conflict of interest provided that users cannot effectively scrutinise these.
· Overall, the new MAD regime should ensure an effective oversight of all activity in the same product (a stock could be traded simultaneously on the home RM and a number of MTFs and OTC spaces). Pan‐European surveillance can only happen with greater cooperation among the venues and between the venues and the supervisors.
Finally, with regard to the proposed extension of the MAD regime to financial instruments and venues that are currently not covered, FESE members strongly believe that the requirements of MAD related to disclosure of inside information, directors’ dealings and insider lists etc. should not apply to financial instruments when they are admitted to trading on a MTF.
© FESE
