European Commission insider dealing rules take effect
The European Commission’s new Market Abuse Regulation
on insider dealing and market manipulation took effect
on 3 July, in a move the Commission says will ensure more
“efficient, transparency and trustworthy” European financial
markets. The rules include measures intended to strengthen
the fight against market abuse across asset classes and
related derivative markets, as well as explicitly banning
the manipulation of benchmarks such as Libor. In addition,
new measures intended to reinforce the investigative and
sanctioning powers of regulators are included. The new
rulebook consists of the Market Abuse Regulation and the
Directive on Criminal Sanctions for Market Abuse.
"I am very pleased that our revamped rulebook against
insider dealing and market manipulation is now taking
effect,” said Jonathan Hill, EU Commissioner responsible for
Financial Stability, Financial Services and Capital Markets
Union. “Having in place clear rules against misbehaviour on
Europe's financial markets is key for their efficient functioning
and investor protection."
Vera Jourová, Commissioner responsible for Justice,
Consumers and Gender Equality added: "Administrative
authorities will now have greater powers to investigate
market abuse and to impose significant fines, while those
found guilty of market abuse will be deterred by the prospect
of facing jail."
SEC proposal could force brokers to disclose how they
handle orders
The US Securities and Exchange Commission has voted to propose
rules that for the first time would require broker-dealers to disclose
the handling of institutional orders to customers. The proposed
rules under Reg NMS would also expand the information included
in existing retail order disclosures.
“These proposed rules are intended to bring order handling
disclosure in line with modern technology and market practice,
providing valuable information to retail and institutional
investors about how their orders are treated,” said SEC Chair
Mary Jo White. “This information should provide investors more
transparency and a powerful new tool to more effectively monitor
broker-dealer routing decisions, especially when combined
with the additional disclosures from alternative trading systems
proposed by the Commission late last year.”
According to the SEC, the proposed rules would require a
broker-dealer to provide a customer, upon request, a report
on its handling of that customer’s institutional orders (orders in
exchange-listed stocks with an original market value of at least
$200,000), containing specified monthly data for the previous six
months. The customer-specific report would also require detailed
order handling information for each venue to which the brokerdealer routed institutional orders for the customer and would be
presented in the aggregate and broken down by passive, neutral,
and aggressive order routing strategies.
Separately, the proposed amendments would require brokerdealers to make public on a quarterly basis aggregated reports
of their handling of all institutional orders, the SEC said. The
Commission is seeking public comment on the proposal for 60
days following its publication in the Federal Register.
August 2016
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