MAR

Tackling financial crime and improving market integrity

The Market Abuse Regulation (MAR) came into effect in 2016, replacing the Market Abuse Directive (MAD). MAR has the same overall goal as its predecessor - preventing market abuse and heightening the overall integrity of the EU & UK financial markets - but extends the scope to new markets, new platforms and new behaviours, and increases the disclosure and record keeping requirements.

The scope of MAR is based on the instruments being traded and includes all instruments that are traded on a regulated market, Multilateral Trading Facility (MTF), Organised Trading Facility (OTF), or certain derivative contracts based on these instruments. Equivalent but separate regulations are in place for UK trading (‘UK MAR’) and the EU (‘EU MAR’) – which one applies is dependent on the location of the market, not the trading firms.

Impact

MAR requires financial firms to proactively identify and report on suspicious activity, market abuse and financial crime, such as insider trading and market manipulation. However, to achieve this they need to holistically review and analyse a broad set of structured and unstructured information, from trades and orders to communications, instant messages or even meeting minutes, which is no small task.

Core MAR Offences

MAR particularly focuses on three ‘core’ offenses – insider dealing, unlawful disclosure of inside information, and market manipulation. These requirements encompass disclosure obligations, including but not limited to:

Disclosure of inside information (with separate requirements for disclosing any delays)
Insider lists
Suspicious transaction and order reports
Investment recommendations and any conflicts contained
Transactions by persons discharging managerial responsibility

The additional data and compliance monitoring required for firms to a) comply with basic disclosure and record keeping requirements and, more importantly, b) conduct the monitoring and surveillance to detect potential market abuse in an effective and timely manner, continues to be a challenge for the industry, and remains one of the regulator’s key issues.

MAR Resources

With a growing pressure to detect market abuse, ensuring compliance with MAR continues to be a pressing issue for many firms

SteelEye’s Trade Surveillance provides firms with the tools to monitor all trades and orders to identify potentially suspicious activity. Combined with SteelEye's Communications Surveillance, firms gain comprehensive cross platform insight. Book a demo to learn more about how SteelEye can help you Comply Smarter™.