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Adoption of ESMA Guidelines under the Market Abuse Regulation

The Market Abuse Regulation (Regulation (EU) No 596/2014 of the European Parliament and of the Council), which aims to strengthen and harmonise the EU regime on market abuse, took effect on 3 July 2016. It increases the scope of existing offences and introduced new offences such as attempted insider dealing, manipulation of benchmarks and commodities, together with more rigorous requirements for firms operating in the EU financial markets. The Market Abuse Regulation applies directly in each EU member state without requiring individual states to enact laws to implement its provisions.

In connection with the implementation of the Market Abuse Regulation the Cyprus Securities and Exchange Commission has published Circulars C170 and C171 dated 8 December 2016 informing issuers of securities admitted to trading on a regulated market, an organised trading facility or a multilateral trading facility that it has adopted the guidelines published by the European Securities and Markets Authority (ESMA) under the regulation on persons receiving market soundings and on delay in the disclosure of inside information.

The ESMA Guidelines on market soundings govern competent authorities, persons receiving market soundings and financial market participants in relation to the factors, the steps and the records that the persons receiving the market soundings will have to consider and implement according to Article 11(11) of the Market Abuse Regulation.

The Guidelines on the delay in the disclosure of inside information provide a non-exhaustive and indicative list of legitimate interests of the issuers that are likely to be prejudiced by immediate disclosure of inside information and situations in which delay of disclosure is likely to mislead the public, according to Article 17(11) of the Market Abuse Regulation.

The Guidelines will apply from 20 December 2016.