Publication
The new framework for stopping scams before they start
Scams are a global phenomenon and no business is immune. In addition to reputational damage and a likely increase in customer complaints.
Global | Publication | June 24, 2016
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On June 17, 2016 the European Commission published a Delegated Regulation on the prevention and detection of market abuse under the Market Abuse Regulation (MAR) in the Official Journal.
Article 16 MAR states that market operators and investment firms that operate a trading venue shall establish and maintain effective arrangements, systems and procedures aimed at preventing and detecting insider dealing, market manipulation and attempted insider dealing and market manipulation under MAR.
MAR requires the European Securities and Markets Authority (ESMA) to develop draft regulatory technical standards to determine appropriate arrangements, systems and procedures, and the notification templates necessary to comply with these requirements. The Delegated Regulation contains the regulatory technical standards and notification templates in substantially the same form proposed by ESMA in its September 2015 final report on the Draft Technical Standards on the Market Abuse Regulation.
The Delegated Regulation entered into force on June 18, 2016 and will apply from July 3, 2016.
On June 17, 2016 the European Commission published a Delegated Regulation on investment recommendations and statistics under the Market Abuse Regulation (MAR) in the Official Journal.
Article 20 MAR provides that persons who produce or disseminate investment recommendations or other information recommending or suggesting an investment strategy shall take reasonable care to ensure that such information is objectively presented, and to disclose their interests or indicate conflicts of interest concerning the financial instruments to which that information relates.
MAR requires the European Securities and Markets Authority (ESMA) to develop draft regulatory technical standards to determine the technical arrangements for the objective presentation of this information. The Delegated Regulation contains the regulatory technical standards in substantially the same form proposed by ESMA in its September 2015 final report on the Draft Technical Standards on the Market Abuse Regulation.
The Delegated Regulation entered into force on June 18, 2016 and will apply from July 3, 2016.
On June 17, 2016 the European Commission published an Implementing Regulation on market soundings under the Market Abuse Regulation (MAR) in the Official Journal.
Article 11 MAR provides that where inside information is disclosed as part of a market sounding, which is the communication of information, prior to the announcement of a transaction, in order to gauge the interest of potential investors, the disclosing market participant is deemed to have made the disclosure in the normal exercise of his employment, profession or duties, such that the disclosure will not amount to market abuse, provided certain conditions in Article 11 are met.
MAR requires the European Securities and Markets Authority (ESMA) to develop implementing technical standards to specify the systems and notification templates to be used by disclosing market participants, and the format of the records to be kept in relation to this. The Implementing Regulation contains the implementing technical standards in substantially the same form proposed by ESMA in its September 2015 final report on the Draft Technical Standards on the Market Abuse Regulation.
The Implementing Regulation entered into force on June 18, 2016 and will apply from July 3, 2016.
On June 17, 2016 the European Commission published a Delegated Regulation on market soundings under the Market Abuse Regulation (MAR) in the Official Journal.
Article 11 MAR provides that where inside information is disclosed as part of a market sounding, which is the communication of information, prior to the announcement of a transaction, in order to gauge the interest of potential investors, the disclosing market participant is deemed to have made the disclosure in the normal exercise of his employment, profession or duties, such that the disclosure will not amount to market abuse, provided certain conditions in Article 11 are met.
MAR requires the European Securities and Markets Authority (ESMA) to develop draft regulatory technical standards to specify the appropriate arrangements, procedures and record-keeping requirements which disclosing market participants are required to establish in order to ensure that market sounding activities are managed and controlled effectively. The Delegated Regulation contains the regulatory technical standards in substantially the same form as set out in the final draft Delegated Regulation by the European Commission in May 2016.
The Delegated Regulation entered into force on June 18, 2016 and will apply from July 3, 2016.
On June 22, 2016 the London Stock Exchange (LSE) published Notice N04/16 (the Notice) providing feedback on Notice N02/16 and the updated Admission and Disclosure Standards (Standards). The Notice confirms the rule changes proposed in N02/16.
Accordingly, amendments have been made to Rule 4.6 (Quarterly disclosure of outstanding depositary receipts) and Schedule 6 (ATT Only) of the Standards. The changes to Schedule 6 include removing previous references to particular Listing Rules and replacing these with new text that replicates the intent of those rules.
In addition to these changes, amendments have been made to the Standards to signpost to issuers their obligations under the Market Abuse Regulation (MAR) which comes into effect on July 3, 2016. The disclosure obligations in MAR will apply to issuers who have requested or approved admission of their financial instruments on the LSE’s regulated market or MTFs.
The updated Admission and Disclosure Standards take effect from July 3, 2016.
On June 17, 2016 the new EU regulatory framework on statutory audit, encompassing the Audit Regulation (Regulation (EU) 537/2014) and Statutory Audit Amending Directive (Directive 2014/56/EU) came into effect and accordingly the European Commission has published an updated version of its frequently asked questions on the reform of the EU statutory audit market. The FAQs provide details about the scope of the new rules and the main changes that they will bring about, including new rules on the audit report and role of the audit committee in public interest entities.
On June 21, 2016 the European Confederation of Directors Associations (ecoDa), in conjunction with PricewaterhouseCoopers (PwC) published guidance for audit committees of public interest entities (PIEs), in light of the more detailed requirements regarding the statutory audit of PIEs introduced by the EU Statutory Audit Amending Directive (2014/56/EU) (the Directive) and the EU Audit Regulation (537/2014) (the Regulation). The guidance is intended to help audit committee members understand the practical implications of the main changes by providing a description of aspects of the new legislation, focusing on the composition and governance of audit committees, selection and appointment of the audit firm, monitoring the auditor’s independence, auditor reporting requirements and oversight. It also provides examples of good practice.
The guidance discusses the following:
Publication
Scams are a global phenomenon and no business is immune. In addition to reputational damage and a likely increase in customer complaints.
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