CMS has released the report Market abuse across Europe – investigation, compliance and MAD II. The report recognizes the problems firms encounter as a result of the complexity of the different national regimes occurring since the first EU's Market Abuse Directive ("MAD I") entered into force.
Member states have implemented MAD I on a minimum harmonisation basis. The result thereof is that member states have maintained and developed different national regimes. The main difficulties relate to the scope of the many over-lapping prohibitions and the different views that regulators take on permitted activities and accepted practices. Also there is a difference in the approach to products traded on a primary multilateral trading facility. Furthermore, firms have to deal with different national procedures for investigating and prosecuting market abuse.
The European Commission has launched a review of MAD I. The new EU legislation will result in a new Market Abuse Regulation ("MAR") and a new directive, MAD II. The changes include the extension of the EU regime, broadening of the prohibitions and strengthening of the investigatory powers and sanctions. Firms will need to prepare for the reform of the market abuse regulation under MAD II and for the changes to be introduced under the MAR.
CMS has developed the CMS online market abuse resource to assist fund managers and other financial institutions. This resource helps firms meet the challenges of MAD II by analyzing EU legislation and the domestic regimes in 19 countries.