S7C New Market Abuse Directive (MAD 2) and Market Abuse Regulation (MAR) Compliance Training Programme©

This new and unique in-house training program will provide attendees with a comprehensive instruction on the new European Union (EU) market abuse regulatory framework governed by the European Securities and Markets Authority (ESMA). The program can be specifically tailored to meet a firm's training needs by allowing firms to choose any 4 modules (1 day training) or 8 modules (2 days training), out of a choice of 10 Modules. The modules cover the new Market Abuse Directive (MAD 2) (Directive 2014/57/EU), Market Abuse Regulation (MAR) (Regulation No 596/2014), and Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (2016 No. 0000) (MARs 2016) substantive obligations in depth. They also cover new obligations for trading venues (Multilateral Trading Facility (MTF), Organised Trading Facility (OTF), Emissions Allowances) and issuers, financial services firms, and persons discharging managerial responsibilities. Firms can choose to gain in-depth instruction on a range of MAR operational practices, as well as benefitting from strategic perspectives on MAD 2 and MAR compliance. New mandatory internal MAR reporting procedures and legitimate behaviour defences, mean that financial services firms need to ensure they have implemented and maintained adequate and effective internal arrangements and procedures for the purposes of MAR and MAD 2, and that employees clearly understand the new regulatory obligations.

Days 1 to 2

MODULE 1: An Introduction to MAD 2 (Directive 2014/57/EU) and MAR (Regulation No 596/2014)

  • Historical background and context.
  • Key MAD 2 and MAR aims, objectives, and milestones.
  • The envisaged operational impact of MAD 2 and MAR on banks, funds, investment firms, and EU issuers, and extraterritorial impact.
  • The interaction of MAD 2 and MAR with the United Kingdom (UK) market abuse framework.

MODULE 2: An Overview of the MAD 2 Substantive Operational Framework

  • New minimum rules for criminal sanctions for: (1) insider dealing, recommending or inducing another person to engage in insider dealing; (2) unlawful disclosure of inside information; (3) market manipulation.
  • New obligations for trading venues (MTFs, OTFs, Emissions Allowances) and issuers.
  • Application to spot commodity contracts, transactions affecting the price or value of spot commodity contracts, and benchmark manipulation.
  • Criminal penalties for natural persons and liability and sanctions for legal persons.

MODULE 3: An Overview of the MAR Substantive Operational Framework

  • New Financial Instruments covered: extension of categories of Financial Instruments as defined by the Markets in Financial Instruments Directive II (MiFID II) (Directive 2014/65/EU).
  • New MAR 2 obligations and offences: (1) issuer disclosure of inside information; (2) market soundings; (3) transactions by persons discharging managerial responsibilities (PDMR); (4) suspicious transactions reporting; (5) algorithmic and high-frequency trading.
  • New whistleblowing obligations: (1) reporting of breaches; (2) whistleblower protections (identity protection of reporting and reported persons); (3) whistleblower financial incentives.

MODULE 4: UK Implementation of MAD 2

  • Existing Market Abuse civil offences (Financial Services and Markets Act 2000, s.118) (Insider Dealing, Improper Disclosure, Manipulating Transactions, Manipulating Devices, Dissemination of Information, Distorting and Misleading Behaviour and the 'Regular User Test').
  • Existing Market Abuse criminal offences for insider dealing and/or misuse of information (Criminal Justice Act 1993) and false or misdealing impression of the supply, demand or value of investments (Financial Services Act 2012, ss.89-95).
  • Civil and Criminal Penalties and Sanctions by the Financial Conduct Authority (FCA) and the Courts.
  • An analysis of the new market abuse operational framework under the Financial Services and Markets Act 2000 (Market Abuse) Regulations 2016 (2016 No. 0000) (MARs 2016).

MODULE 5: MAR OPERATIONAL PRACTICES I: Suspicious Transaction and Order Reporting

  • Suspicious transaction and order report (STOR) obligations for: (1) market operators and investment firms operating trading venues; and (2) any person professionally arranging or executing transactions.
  • New obligations for (1) reasonably suspicious orders; (2) level of suspicion required; (3) detection; (4) training; and (5) cancellation and modification of orders.
  • Level II Regulatory Technical Standards (RTS) obligations (general requirements; prevention, monitoring and detection; training; reporting; timing; content; transmission) and Notification Templates. 

MODULE 6: MAR OPERATIONAL PRACTICES II: Buy-back Programmes and Stabilisation Measures

  • Trading in own shares in buy-back programmes exemption, qualifying operational conditions (disclosure, reporting, limits) and qualifying programme conditions (reduction of issuer capital, debt financial instrument and share obligations).
  • Stabilisation of securities exemption, qualifying operational conditions (duration, disclosure and notification, price limits).
  • Buy-back programme and stabilisation measures compliance with Level II RTS obligations (trading conditions, time and volume restrictions, disclosure and reporting obligations, price conditions).

MODULE 7: MAR OPERATIONAL PRACTICES III: Accepted Market Practices

  • Establishing legitimate reasons and conforming with accepted market practice.
  • Competent authority accepted market practice criteria (transparency, safeguards, market liquidity and efficiency, trading mechanism, integrity of related markets, investigations, market structural characteristics).
  • Accepted market practices compliance with Level II RTS obligations.
  • Competent authority reviews and ESMA accepted market practices lists and annual reports.

MODULE 8: MAR OPERATIONAL PRACTICES IV: Market Soundings

  • The new Market Soundings operational framework under MAR, Article 11.
  • Procedural conditions and obligations for market participants (written records, consent, obligations to inform).
  • ESMA Guidelines addressed to persons receiving market soundings (Regulation (EU) No 1095/2010, Article 16).
  • Level II RTS and Implementing Technical Standards (ITS) on appropriate arrangements, procedures and record keeping requirements.

MODULE 9: New MAR Exemptions and Powers and Sanctions

  • New Exemptions: (1) trading in own shares in buy-back programs; (2) trading in securities for the stabilization of securities exception and eligibility conditions; (3) public authorities in pursuit of monetary, exchange rate, or public debt management policy; (4) EU Agricultural Policy and Climate Policy; (5) Chinese Walls.
  • New Powers and Sanctions: (1) Minimum Supervisory and Investigatory Powers (document and data access; interviews; dawn raids, inspections, recordings, data traffic, telecommunications operators, temporary prohibitions); (2) Administrative Sanctions and Measures; (3) Financial Penalties (individuals, companies).

MODULE 10: Strategic Perspectives on MAD 2 and MAR Compliance

  • MAD 2 and MAR compliance and modification of existing Information Technology (IT) infrastructures.
  • Holistic adjustment of internal compliance frameworks for market participants.
  • The impact of new provision of research obligations under MAR and MiFID II, developing robust internal policies and procedures for market sounding practices, the impact on corporate treasury functions.
  • Insights into ESMA's cross-border enforcement of market abuse and enforcement trends.
 

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