FIA Submits Market Abuse Regulation Response

The main points of the response follow:

• We urge ESMA to look at the criteria for defining inside information in the round. If a piece of information is reasonably expected to be disclosed, or required to be disclosed, but it is never likely to have a significant price effect if it were disclosed, then it should not feature in these guidelines, e.g. the illustrative examples in relation to freight markets in paragraph 35 and 36 of the CP.
• This is an area, which may well develop over time, with education through experience, of what the market may reasonably expect, with various regional or national permutations. The amount of information legally required to be disclosed will increase with the throughput of regulation. We call for as much clarity as possible so that the industry can conduct its businesses in an appropriate manner, as per the FCA’s Senior Management regime, from Day 1.
• Where the information depends on MiFID II, we would recommend ESMA give clarity on the application date of the guidelines.

Background: Article 7(1)(b) of Regulation (EU) No 596/20143 (MAR) defines inside information in relation to commodity derivatives as «information of a precise nature, which has not been made public, relating, directly or indirectly to one or more such derivatives or relating directly to the related spot commodity contract, and which, if it were made public, would be likely to have a significant effect on the prices of such derivatives or related spot commodity contracts, and where this is information which is reasonably expected to be disclosed or is required to be disclosed in accordance with legal or regulatory provisions at the Union or national level, market rules, contract, practice or custom, on the relevant commodity derivatives markets or spot markets». Article 7(5) of MAR provides that ESMA shall issue guidelines to establish a non-exhaustive indicative list of information which is reasonably expected or is required to be disclosed.