Companies hit hard by wide net of MAD II

Author: Danielle Myles | Published: 10 Mar 2015
MAR’s record-keeping requirements could overwhelm some issuers

Massive compliance burdens faced by corporates under Europe’s incoming market abuse rules negate many benefits of avoiding a listing on a main exchange.

Commentators warn that many smaller companies won’t understand, or even be aware of their obligations under the new regime. It’s possible some may not comply, risking an administrative penalty rather making the internal investments needed to satisfy the EU rules.

The wide net cast by the Market Abuse Regulation (MAR), which replaces the Market Abuse Directive (MAD) next year, has been overshadowed by the criminal sanctions that will apply to market manipulation.

Yet MAR’s application to securities traded on multilateral trading facilities (MTF) and organised trading facilities (OTF) – rather than just regulated markets, as was the case under MAD – means smaller companies with securities traded on local exchanges could be hit hardest by the new framework.