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October 14, 2019

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ESMA Updates Q&As Relating to Short-Selling Regulation; ESMA Updates Q&As Relating to Transparency and Market Structures; ESMA Updates Q&As Relating to the Market Abuse Regulation

ESMA Updates Q&As Relating to Short-Selling Regulation

On November 14, the European Securities and Markets Authority (ESMA) published its updated questions and answers document (Q&As) on the implementation of the Short-Selling Regulation (SSR).

ESMA has added a new Q&A, 4.10, which clarifies that as a result of the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR), Commission Delegated Regulation (EU) 2017/590 should be followed for the reporting of transactions to competent authorities. Previously, identification of the relevant competent authority was made under Commission Implementing Regulation 1287//2006. Consequently, the relevant competent authority for SSR purposes coincides with the national competent authority of the most liquid market in terms of liquidity for transaction reporting purposes, as published by ESMA under the Financial Instrument Reference Data section of its website.

The purpose of the Q&As is to promote common, uniform and supervisory approaches and practices in the application of the SSR.

The updated Q&As on the SSR are available here.

ESMA Updates Q&As Relating to Transparency and Market Structures

On November 14, the European Securities and Markets Authority (ESMA) published the following updated questions and answers document (Q&As):

  1. an updated version of the Q&As on transparency topics under the revised Markets in Financial Instruments Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR). ESMA has added two points to Q&A 7 and modified Q&A 10 in section 2 of the Q&As (General Q&As on transparency topics), and added a new Q&A 11 to section 7 (the systematic internalizer regime); and

  2. an updated version of the Q&As on market structures topics under MiFID II and MiFIR. ESMA has added a new Q&A 29 to section 3 (direct electronic access and algorithmic trading).

The updated Q&As on transparency topics are available here.

The updated Q&As on market structures topics are available here.

ESMA Updates Q&As Relating to the Market Abuse Regulation

On November 12, the European Securities and Markets Authority (ESMA) published version 13 of its questions and answers document (Q&As) on the Market Abuse Regulation (MAR).

The Q&As now include a new question, 7.10, relating to the scope of the trading restrictions for persons discharging managerial responsibilities (PDMRs) during a closed period under MAR. ESMA clarifies that the prohibition in MAR does not encompass transactions of the issuer relating to its own financial instruments, even if the PDMRs themselves are making the decision or putting a previous decision into practice. When a PDMR acting in its capacity as a director or employee of the issuer, such actions are not PDMR transactions for a third-party account, but are instead transactions of the issuer itself, therefore the prohibition does not apply.

The Q&As, however, point out that any transaction carried out by the issuer during a closed period should be considered carefully, as the issuer remains subject to the prohibition under MAR of insider trading. Therefore, if the issuer is in possession of inside information relating to its own financial instruments, the issuer will be prevented from trading on them unless it had established, implemented and maintained the internal amendments and procedures identified in MAR.

Version 13 of ESMA’s Q&As on MAR is available here.

©2019 Katten Muchin Rosenman LLP

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John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

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Carolyn H. Jackson, International Attorney, Katten Muchin law firm
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Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

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Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
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Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

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Neil Robson, private equity fund managers counselor, Katten Law Firm, London
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Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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