Response to CESR's consultation on Level 3 of the Market Abuse Directive
The London Stock Exchange has responded to CESR’s consultation paper regarding Level 3 of the Market Abuse Directive. We support CESR’s work at Level 3 which we believe is important for ensuring common approaches are taken, allowing for uniform application of the Directive across the EU. The three areas addressed in this consultation are:
Accepted Market Practices - we believe that whilst AMP’s should be the responsibility of the individual CESR members, regulators need to find workable solutions that enable participants to operate cross-border, so that they are not required to act in very different ways in different jurisdictions. We also call for an AMP on stabilisation of distribution of securities to which the safe harbour does not apply, such as non-EU securities.
Market manipulation - we broadly agree with the guidelines CESR is proposing here, however, we have called for clearer wording that the signals described in section IV are only guidelines, they are not conclusive, and should not necessarily be deemed in themselves to constitute market manipulation.
Possible signals of Suspected Insider Dealing or Market Manipulation Transactions - we support CESR’s work in developing a format for reporting suspicious transactions which would be recognised on a pan-European basis. We also highlight that individual firms should not be expected to develop complex electronic surveillance systems for identifying market abuse, as this is best carried out by those with oversight over a whole market (e.g. FSA, working in co-operation with exchanges).
The original consultation paper can be found at: www.cesr-eu.org