Adopted in January 2003, the Market Abuse Directive (MAD) 2003/6/EC, together with other implementing legislation, established an EU-wide framework for preventing and tackling market abuse. The European Commission embarked on a review of MAD in 2010, culminating in the publication of legislative proposals on 20 October 2011. These consist of a draft Regulation (the “Regulation”), which sets out a revised and harmonised civil market abuse regime and ancillary requirements, and a draft Directive (“MAD 2”), which contains a new criminal market abuse regime. The existing directive, MAD, will be repealed in its entirety.
The Commission’s legislative proposals for a new market abuse regime have to be considered also in conjunction with its parallel proposals, published on the same day, for a revised Markets in Financial Instruments Directive (MiFID II) and an accompanying Markets in Financial Instruments Regulation (MiFIR). These would introduce a wider set of trading venues, including, apart from regulated markets and multilateral trading facilities, so-called organised trading facilities. MAD 2 and the Regulation would create civil and criminal offences in relation to securities that are admitted to trading on any of these MiFID II trading venues. MAD 2 and the Regulation would also track the anticipated wider scope of MiFID II, which would treat emission allowance certificates as financial instruments.
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