Activities of Kay SWINBURNE related to 2011/0295(COD)
Plenary speeches (1)
Insider dealing and market manipulation (market abuse) (debate)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council on insider dealing and market manipulation (market abuse) PDF (701 KB) DOC (586 KB)
Amendments (38)
Amendment 62 #
Proposal for a regulation
Recital 6
Recital 6
(6) The Commission Communication on ‘A Small Business Act for Europe’26 calls on the Union and its Member States to design rules in order to reduce administrative burdens, to adapt legislation to the needs of issuers on markets for small and medium sized enterprises and to facilitate the access to finance of those issuers. A number of provisions in Directive 2003/6/EC impose administrative burdens on issuers, notably those whose financial instruments are admitted to trading on SME growth markets, that should be reduced in a proportionate way that still allows for supervisors to step in should cases of market abuse be suspected.
Amendment 65 #
Proposal for a regulation
Recital 10
Recital 10
(10) Member States and the European System of Central Banks, the European Financial Stability Facility, national central banks and other agencies or special purpose vehicles of one or several Member States as well as the Union and certain other public bodies should not be restricted ibut shall be transparent when carrying out monetary, exchange-rate or public debt management or climate policy.
Amendment 72 #
Proposal for a regulation
Recital 14 a (new)
Recital 14 a (new)
(14 a) It is not the intention of this Regulation to prohibit reasonable discussions between shareholders and other market participants and management concerning a company and its prospects. Such involvement of the shareholders in the corporate governance of a company should be considered essential to the proper functioning of the relationship between companies and shareholders.
Amendment 84 #
Proposal for a regulation
Recital 14 c (new)
Recital 14 c (new)
(14 c) When an investment firm receives an unsolicited approach regarding potential interest in a new issuance by a firm carrying out a 'book building' exercise it should not automatically be prohibited from dealing in other financial instruments in that entity provided that it has adequate compliance measures in place to prevent the information being used for trading purposes.
Amendment 85 #
Proposal for a regulation
Recital 14 b (new)
Recital 14 b (new)
(14 b) The mere fact that market-makers, bodies authorized to act as counterparties, or persons authorized to execute orders on behalf of third parties with inside information confine themselves, in the first two cases, to pursuing their legitimate business of buying or selling financial instruments or, in the last case, to carrying out an order dutifully, should not in itself be deemed to constitute use of such inside information.
Amendment 101 #
Proposal for a regulation
Recital 23 a (new)
Recital 23 a (new)
(23 a) Given the rise in the use of websites, blogs and social media types by both issuers and investors, it is important to make clear that disseminating false or misleading information via social media sites or unattributable blogs should be considered market abuse in the same way as via more traditional communication channels.
Amendment 107 #
Proposal for a regulation
Recital 27
Recital 27
(27) Insider lists are an important tool for regulators when investigating possible market abuse, but national differences in regards to data to be included in those lists impose unnecessary administrative burdens on issuers. Data fields required for insider lists should therefore be uniform in order to reduce those costs. The requirement to keep and constantly update insider lists imposes administrative burdens specifically on issuers on SME growth markets. As competent authorities are able to exercise effective market abuse supervision without having those lists available at all times for those issuers they should be exempt from this obligation in order to reduce the administrative costs imposed by this Regulation, however this information should be made available on request by the national competent authority should market abuse be suspected.
Amendment 111 #
Proposal for a regulation
Recital 28
Recital 28
(28) Greater transparency of transactions conducted by persons discharging managerial responsibilities at the issuer level and, where applicable, persons closely associated with them, constitutes a preventive measure against market abuse. The publication of those transactions on at least an individual basis can also be a highly valuable source of information to investors. It is necessary to clarify that the obligation to publish those managers' transactions also includes the pledging or lending of financial instruments and also transactions by another person exercising discretion for the manager. In order to ensure an appropriate balance between the level of transparency and the number of reports notified to competent authorities and the public, a unimetric form a threshold should be introduced in this Regulation below which transactions shall not be notified.
Amendment 112 #
Proposal for a regulation
Recital 28 a (new)
Recital 28 a (new)
(28 a) The highest possible standards should be used for the disclosure of director's transactions and in all of their public communication.
Amendment 116 #
Proposal for a regulation
Recital 31
Recital 31
(31) Existing telephone and data traffic records from investment firms executing transactions, and existing telephone and data traffic records from telecom operators constitute crucial, and sometimes the only, evidence to detect and prove the existence of insider dealing and market manipulation. Telephone and data traffic records may establish the identity of a person responsible for the dissemination of false or misleading information, that persons have been in contact at a certain time, and that a relationship exists between two or more people. In order to introduce a level playing field in the Union in relation to the access by competent authorities to telephone and existing data traffic records held by a telecommunication operator or by an investment firm, cCompetent authorities should be able to require existing telephone and existing data traffic records held by a telecommunication operator or by an investment firm, where a reasonable suspicion exists that such records related to the subject-matter of the inspection may be relevant to prove insider dealing or market manipulation as defined in [new MAD] in violation of this Regulation or Directive [new MAD]. Telephone and data traffic records do not encompassWhere national law allows, this should include the content of such records.
Amendment 117 #
Proposal for a regulation
Recital 32
Recital 32
(32) Since market abuse can take place across borders and markets, competent authorities should be required to cooperate and exchange information with other competent and regulatory authorities, and with ESMA, in particular in relation to investigation activities. Where a competent authority is convinced that market abuse is being, or has been, carried out in another Member State or affecting financial instruments traded in another Member State, it should notify that fact to the competent authority and ESMA. In cases of market abuse with cross-border effects, ESMA should be requiredable to coordinate the investigation if requested to do so by one of the competent authorities concerned.
Amendment 144 #
Proposal for a regulation
Article 4 – paragraph 1 a (new)
Article 4 – paragraph 1 a (new)
1 a. Any body that uses the exemptions provided for under this Article should ensure that it has robust internal rules to monitor and mitigate conflicts of interest as well as systems and controls to prevent market abuse by internal employees or any outside contractors.
Amendment 145 #
Proposal for a regulation
Article 4 – paragraph 2
Article 4 – paragraph 2
Amendment 160 #
Proposal for a regulation
Article 5 – paragraph 1 – subparagraph 1a (new)
Article 5 – paragraph 1 – subparagraph 1a (new)
The Commission may adopt by means of delegated acts in accordance with Article 31, measures specifying some technical elements of the definitions laid down in this paragraph to adjust them to market developments.
Amendment 167 #
Proposal for a regulation
Article 6 – paragraph 1 – point b
Article 6 – paragraph 1 – point b
(b) in relation to derivatives on commodities, information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more such derivatives or 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; notably information and which is required to be disclosed in accordance with legal or regulatory provisions at the Union or national level, market rules, standard contracts or customs, on the relevant commodity derivatives or spot markets.
Amendment 176 #
Proposal for a regulation
Article 6 – paragraph 3
Article 6 – paragraph 3
3. For the purposes of applying paragraph 1, information which, if it were made public, would be likely to have a significant effect on the prices of the financial instruments, the related spot commodity contracts, or the auctioned products based on the emission allowances shall mean information a reasonable investor would be likely to use as part of the basis of his investment decisionsith market knowledge and experience would be likely to use as a material factor in making his investment decision on whether to acquire or dispose of a specific financial instrument, spot commodity contract or auction product, or the quantity or price at which to do so.
Amendment 186 #
Proposal for a regulation
Article 7 – paragraph 3 a (new)
Article 7 – paragraph 3 a (new)
3 a. The use or onward disclosure of the recommendations or inducements referred to in paragraph 3 amounts to insider dealing when the person using or disclosing the recommendation or inducement knows or ought to know, that it is based upon insider information.
Amendment 193 #
Proposal for a regulation
Article 7 – paragraph 6 a (new)
Article 7 – paragraph 6 a (new)
6 a. Insider dealing does not arise where the person possessing inside information uses that information in the context of a public takeover bid for the purposes of gaining control of the company to which the information relates or proposing a merger of that company.
Amendment 196 #
Proposal for a regulation
Article 7 – paragraph 7
Article 7 – paragraph 7
7. Where the person referred to in paragraph 1this Article is a legal person, the provisions of that paragraphArticle shall not apply to a transaction by the legal person if the legal person had in place effective arrangements which ensure that no person in possession of inside information relevant to the transaction had any involvement in the decision or behaved in such a way as to influence the decision or had any contact with those involved in the decision whereby: a) that person did not encourage, recommend, induce or otherwise influence the natural person who made the decision on its behalf to acquire or dispose of financial instruments to which the information relates; and (b) the legal person had established, implemented and maintained adequate and effective internal arrangements and procedures to ensure that neither the natural person referred to in sub- paragraph (a), nor any other natural person who may have had any influence on the decision to acquire or dispose of those information could have been transmitted or its existence could have been indicated. struments, was in possession of the inside information referred to in point (a)
Amendment 199 #
Proposal for a regulation
Article 7 – paragraph 7 a (new)
Article 7 – paragraph 7 a (new)
7 a. Where the person referred to in this Article is a legal person, the provisions of that Article shall not apply to a transaction carried out by that person if the natural person who made the decision on its behalf to acquire or dispose of financial instruments to which the information relates did not possess that information and was not encouraged, recommended, induced or otherwise influenced to carry out that transaction by the legal person.
Amendment 205 #
Proposal for a regulation
Article 7 – paragraph 9 a (new)
Article 7 – paragraph 9 a (new)
9 a. A person possessing inside information shall be deemed not to use that information, and therefore not to commit insider dealing, in the following circumstances: (a) when that person is acting as a market maker or as a body authorised to act as a counter party and the acquisition or disposal of financial instruments to which that information relates is made legitimately in the normal course of the exercise of his employment, profession or duties; or (b) when that person is authorised to execute orders on behalf of third parties, and the acquisition or disposal of financial instruments to which the order relates is made to carry out such an order legitimately in the normal course of the exercise of his employment, profession or duties; or (c) when that person establishes that they have not used inside information when acquiring or disposing of financial instruments to which the information relates.
Amendment 234 #
Proposal for a regulation
Article 8 – paragraph 3 – point a
Article 8 – paragraph 3 – point a
(a) conduct by a person, or persons acting in collaboration, to secure a dominant position over the supply of or demand for a financial instrument or related spot commodity contracts which has the effect of fixing, directly or indirectly, purchase or sale prices or creating other unfair trading conditions, or setting prices to an abnormal and artificial level using derivative instruments.
Amendment 257 #
Proposal for a regulation
Article 8 a (new)
Article 8 a (new)
Article 8 a Use of Algorithms In line with the provisions of Article 17 of MiFID, should any firm which engages in algorithmic trading fail to report to their competent authority a material change in the function of their algorithm or their trading strategy, then any resulting detrimental impact upon the market should be considered abusive and dealt with via the full force of this regulation.
Amendment 264 #
Proposal for a regulation
Article 10 a (new)
Article 10 a (new)
Article 10 a Abusive order entry Operators of trading venues shall have in place rules to avoid abusive market entry in line with article 51 of Directive [new MiFID]. Market operators should be obliged to report to national competent authorities should any market participant break these rules on a systematic and repetitive basis in order for competent authorities to take appropriate action under this Regulation.
Amendment 277 #
Proposal for a regulation
Article 12 – paragraph 1
Article 12 – paragraph 1
1. An issuer of a financial instrument shall inform the public and the competent authorities as soon as possible of inside information, which directly concerns the issuer, and shall, for an appropriate period, post on its Internet site all inside information it is required to disclose publicly.
Amendment 304 #
Proposal for a regulation
Article 13 – paragraph 2
Article 13 – paragraph 2
2. Issuers of a financial instrument whose financial instruments are admitted to trading on an SME growth market shall be exempt from drawing up such a list. However,if the following conditions are met: (a) they take all reasonable steps to ensure that any person with access to inside information is aware of the legal and regulatory duties entailed and the sanctions attached to the misuse or improper circulation of such information; and (b) if requested to do so by the competent authority as part of the exercise of its supervisory or investigatory functions, that issuer shall provides the competent authority with a list identifying those persons working for them with access to inside informationho have access to inside information or who had access to information which would have constituted inside information before it was made public and which is identified by the competent authority as relevant to the functions referred to in this sub- paragraph.
Amendment 307 #
Proposal for a regulation
Article 13 – paragraph 3
Article 13 – paragraph 3
3. This Article shall not apply to issuers who have not requested or approved admission of their financial instruments to trading on a regulated market in a Member State or, in the case of an instrument only traded on a MTF or an OTF, have not requested or approved trading of their financial instruments on a MTF or an OTF in a Member State, such as in the case of a third country issuer.
Amendment 316 #
Proposal for a regulation
Article 14 – paragraph 3
Article 14 – paragraph 3
3. Paragraph 1 shall notonly apply to transactions totalling under EUR 20,000 oveabove an agreed amount or volume, or othe period of a calendar yearr metric as defined by the ESMA in delegated acts.
Amendment 323 #
Proposal for a regulation
Article 14 – paragraph 5
Article 14 – paragraph 5
5. The Commission may adopt, by means of delegated actsESMA shall develop draft regulatory technical standards, in accordance with Article 312, measures modifying the threshold in paragraph 3 taking into account the developments in financial markets.
Amendment 324 #
Proposal for a regulation
Article 14 – paragraph 5 a (new)
Article 14 – paragraph 5 a (new)
5 a. ESMA shall submit the draft regulatory technical standards referred to in paragraph 5 to the Commission by [...]*. Power is delegated to the Commission to adopt the regulatory standards referred to in paragraph 5 in accordance with Articles 10-14 of Regulation (EU) No 1095/2010. __________________ * OJ please insert date: 12 months after entry into force of this Regulation.
Amendment 341 #
Proposal for a regulation
Article 17 – paragraph 2 – point f
Article 17 – paragraph 2 – point f
(f) require existing telephone and existing data traffic records held by a telecommunication operator or by an investment firm, where a reasonable suspicion exists that such records related to the subject- matter of the inspection may be relevant to prove insider dealing or market manipulation as defined in[new MAD] in violation of this Regulation or Directive [new MAD]; these records shall however notonly concern the content of the communication to which they relate where the release of such records is consistent with Union and national data protection laws.]
Amendment 342 #
Proposal for a regulation
Article 17 – paragraph 2 – point f a (new)
Article 17 – paragraph 2 – point f a (new)
(f a) require, insofar as is permitted by national law, existing telephone and existing data traffic records held by a telecommunication operator where a reasonable suspicion exists that such records may be relevant to prove insider dealing or market manipulation in violation of this Regulation; the records shall also include the content of voice communications by telephone where permitted.
Amendment 345 #
Proposal for a regulation
Article 17 – paragraph 2 – point f b (new)
Article 17 – paragraph 2 – point f b (new)
(f b) require, insofar as is permitted by national law, existing telephone and existing data traffic records held by a telecommunication operator where a reasonable suspicion exists that such records may be relevant to prove the criminal offences of insider dealing or market manipulation as defined in [new MAD].
Amendment 353 #
Proposal for a regulation
Article 17 a (new)
Article 17 a (new)
Article 17 a Cross market Surveillance Cross-market order book surveillance needs to be ensured through implementation of MiFID and MiFIR rules concerning trading venues, requiring all order book data be stored and made available to national competent authorities upon request.
Amendment 354 #
Proposal for a regulation
Article 19 – paragraph 5 – subparagraph 2
Article 19 – paragraph 5 – subparagraph 2
The competent authority shall inform ESMA of any request referred to in the first subparagraph. In case of an investigation or an inspection with cross- border effect, ESMA shallmay if requested to do so by one of the competent authorities coordinate the investigation or inspection. ESMA shall decline the request if it considers that the investigation or inspection is more appropriately carried out by a national competent authority.
Amendment 358 #
Proposal for a regulation
Article 20 – paragraph 2 – subparagraph 2
Article 20 – paragraph 2 – subparagraph 2
ESMA shall, wherever possible, also coordinate the exchange between competent authorities of Member States of information obtained from competent authorities of third countries that may be relevant to the taking of measures under Articles 24, 25, 26, 27 and 28. Where it is not possible for ESMA to coordinate the exchange of information, the relevant competent authorities may exchange the information in conformity with the objectives of this Regulation.
Amendment 374 #
Proposal for a regulation
Article 26 – paragraph 1 – point l
Article 26 – paragraph 1 – point l
(l) in respect of a natural person, administrative pecuniary sanctions of up to [EUR 5 000 000] or in the Member States where the Euro is not the official currency, the corresponding value in the national currency on the date of entry to force of this Regulationan unlimited amount;
Amendment 398 #
Proposal for a regulation
Article 34 a (new)
Article 34 a (new)
Article 34 a ESMA advisory committee on technology in financial markets By 30 June 2014, ESMA shall establish an advisory committee of national experts to establish which technological developments in the markets could potentially constitute market abuse or market manipulation with a view to: a) increase ESMA's knowledge about new technology related trading strategies and their potential for abuse, b) add to the list of abusive practices that have already been identified that relate specifically to high frequency trading strategies and c) assess the effectiveness of different trading venues approaches to dealing with the risks associated with any new trading practices. As a result of the analysis, ESMA should produce additional guidelines for best practice across the EU financial markets.