The European Securities and Markets Authority (ESMA) has published its final technical standards on three financial regulations:
- Markets in Financial Instruments Directive (MiFID II),
- Market Abuse Regulation (MAR) and
- Central Securities Depositaries Regulation (CSDR).
The technical standards explain how the legislation will apply in practice, increasing the transparency, safety and resilience of European financial markets, as well as investor protection. The three regulations are some of the most important legislative measures to be introduced following the financial crisis of 2008.
ESMA's Chair, Steven Maijoor, said: “The rules put out by ESMA today on MiFID II, MAR and CSDR will notably change the way Europe’s secondary markets function... The magnitude of this change should not be underestimated.”
The rules on MiFID II will mean the majority of non-equity products are governed by a robust regulatory regime, while a significant part of OTC trading will be moved onto regulated platforms.
The MAR technical standards will strengthen the existing market abuse framework by extending its scope to new markets, platforms and behaviours. They contain prohibitions for insider dealing and market manipulation, and provisions to prevent and detect these.
The technical standards for CSD cover cooperation requirements among authorities and requirements for the recognition of third-country CSDs, ensuring a level playing field.
The European Commission, which has received the final draft of the technical standards, now has three months to approve them. After CSDR, which entered into force back in 2014, MAR and MiFID II will enter into force in 2016 and 2017 respectively.