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The CFA Institute Centre for Financial Market Integrity Responds to Market Abuse Directive Consultation

 

The CFA Institute Centre calls for the development of a central filing repository for Insider Lists and Suspicious Transaction Reports

 

 

London, September 30, 2008 − The CFA Institute Centre for Financial Market Integrity (‘The CFA Institute Centre’) has outlined its support for the convergent implementation and application of the EU Market Abuse Directive in its response to the Committee of European Securities Regulators’ (CESR) consultation on the EU Market Abuse Directive. The call for responses to this CESR consultation comes at a critical time for capital markets as they struggle to restore confidence and integrity.

 

The CESR consultation, entitled “Level 3 – Third set of CESR guidance and information on the common operation of the Directive to the market,” focuses on Insiders Lists and Suspicious Transactions Reporting and specifically deals with “Level 3” guidance, which is concerned with achieving a common approach to the operation of the Directive amongst EU supervisors.

 

In its response, the CFA Institute Centre has called for the creation of a European Central Repository, which would be the central filing repository for filing Insider Lists and Suspicious Transaction Reports. The benefits of this would be to standardize filing requirements across the EU and enable the harmonization of reporting, which in turn should lead to a reduction in the current administrative burden in this field. It is also envisaged that the Central Repository would encourage better regulatory cooperation amongst national supervisors and help facilitate the exchange of information on market abuse issues.

 

The CFA Institute Centre has also outlined in its response a need for greater clarity over a) the notion of Direct and Indirect Information, b) the issue of a Pro-Forma Guidance for the production of Insiders’ Lists, and c) specific guidance in the area of Commodity Derivatives describing what is and what is not a suspicious trade. The Centre has also called for extending the requirements to produce Insider Lists to private companies that plan to list via an Initial Public Offering (IPO).

 

Charles Cronin, CFA, Head of CFA Institute Centre for Financial Market Integrity, said, “Given the mammoth task ahead of us to restore confidence and trust in capital markets, the importance of developing an appropriate regulatory regime to deal with market abuse is critical. We are very supportive of continuing efforts to achieve a harmonized market abuse regime across the EU as we believe that it will benefit investors, listed companies, and regulators alike. In due course, we look forward to working with CESR and the EU national regulators on its implementation.”

 

The complete CFA Institute Centre response can be viewed through this link: Level 3 – Third set of CESR guidance and information on the common operation of the Directive to the market (PDF)

  

About the CFA Institute Centre for Financial Market Integrity

The CFA Institute Centre develops timely, practical solutions to global capital market issues. Established in 2004, the CFA Institute Centre builds upon the CFA Institute mission to lead the investment profession globally by setting the highest standards of ethics, education, and professional excellence. It carries forward the organization’s 60-year history of standards and advocacy work, especially its Code of Ethics and Standards of Professional Conduct for the investment profession. More information may be found at www.cfainstitute.org/centre.