The European Securities and Markets Authority published translations of the final Guidelines on information expected or required to be disclosed on commodity derivatives markets or related spot markets under the Market Abuse Regulation in the official languages of the EU. MAR replaced the current Market Abuse Directive and its implementing legislation from July 3, 2016. The publication of the translations triggers the application of the Guidelines from March 17, 2017. The Guidelines are relevant to national regulators and to commodity derivatives market participants such as investors, financial intermediaries, operators of trading venues and persons professionally arranging and executing transactions in commodity derivatives. National regulators have until March 17, 2016 to advise ESMA whether or not they intend to comply with the final Guidelines.
One of the changes that MAR introduced is the expansion of the definition of inside information relating to commodity derivatives to cover price sensitive information relevant to the related spot commodity contracts as well as the derivative. This means that transactions in commodity derivatives based on inside information relating to underlying spot transactions will be expressly prohibited. In addition, the market manipulation prohibitions will include transactions in derivatives markets that manipulate the related spot commodity transaction and transactions in spot commodity markets that manipulate the related derivative. Under MAR, market participants must disclose inside information to the public, with delayed or selective disclosure allowed in only limited circumstances. MAR requires ESMA to issue guidelines to establish a non-exhaustive list of information which is reasonably expected or is required to be disclosed in accordance with EU or national law requirements, on the relevant commodity derivatives markets or spot markets. Inside information for commodity derivatives includes information that is of a precise nature which has not yet been made public that relates, either directly or indirectly, to one or more derivatives or directly to the related spot commodity contract and which, if made public, would likely have a significant effect on the prices of such derivatives or contracts. The final Guidelines stipulate that for information to be “reasonably expected to be disclosed” it should be: (i) widely accessible in a non-discriminatory way after disclosure; (ii) contained in an official statement and not part of a private or personal opinion or analysis; and (iii) not a rumor nor a speculative statement.
Examples of information relating directly to commodity derivatives includes information required to be published by trading venues in accordance with the revised Markets in Financial Instruments Directive about the aggregate position held by different categories of persons for the different commodity derivatives traded on their venue. To the extent that the commodity derivatives are standardized, the final Guidelines state that market participants would reasonably expect to receive infrequent information about the circumstances affecting the fundamental characteristics of the commodity derivative or the contract on which such commodity derivative is based.
View translations of the Guidelines.
