Article 20(1) of the Market Abuse Regulation requires that persons who produce or disseminate investment recommendations or other information recommending or suggesting investment strategies should take reasonable care to ensure objective presentation and to disclose their interests or indicate conflicts of interest concerning the financial instruments to which that information relates.
Article 20(3) of MAR requires the European Securities and Markets Authority to develop draft regulatory technical standards to determine the technical arrangements for the categories of person referred to in article 20(1), for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest.
On September 28, 2015 ESMA published a final report on draft technical standards on MAR and submitted it to the European Commission. The Commission has now adopted a delegated Regulation that sets out regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest.
The layout of the delegated Regulation is as follows:
- Article 1: definitions of “expert” and “group”;
- Article 2: provides for rules on identity of producers of recommendations;
- Article 3: introduces a general standard on objective presentation of recommendations, applicable to any person mentioned in article 20(1) MAR;
- Article 4: sets out that persons referred in indent (i) of article 3(1)(34) of MAR, as well as experts referred to in indent (ii) of article 3(1)(34) of MAR have to maintain records of all recommendations produced on any issuer or financial instrument and disseminated during the preceding 12 month period;
- Articles 5 and 6: determine the general standards and additional obligations in relation to disclosure of interests or of conflicts of interest which ensure that these disclosures are specific enough as to enable the recipient of the recommendation to take an informed view of the degree and nature of the conflict of interest;
- Article 7: ensures that if a person producing recommendations disseminates a recommendation it produced that person shall include in the recommendation the date and time at which the recommendation is first disseminated;
- Articles 8 to 10: provide for specific arrangements for dissemination of recommendations, their summary or extract and when recommendations are substantially altered.
The delegated Regulation will enter into force on the day following that of its publication in the Official Journal of the European Union. It will apply from 3 July 2016.
