The Market Abuse Regulation (MAR) came into effect on 3 July 2016. It aims to increase market integrity and investor protection, enhancing the attractiveness of securities markets for capital raising. The Market Abuse Regulation (MAR) strengthens the existing UK market abuse framework by extending its scope to new markets, new platforms and new behaviors.

Regulatory Authorities

ESMA - European Securities and Markets Authority

FCA - Financial Conduct Authority (UK)

Other Regulators in the EU and European Economic Area (EEA)

Relevant articles for Recording and Surveillance

Article 8 and 10 - Trading on Material Non-Public Information (MNPI) - Ensure that any employees that have access to or come in contact with MNPI are recorded.

Annex II Section 1, Intent - Firms will need to prevent Fraudulent Trading Practices and Intent. Firms will need to record to identify possible fraudulent behavior and any failure to reproduce requested data will result in penalties.

Annex II Section 1, Intent - Firms are required to have programs to detect behavior that may have relevance in terms of fraudulent trading practices and intent. If requested, evidence must be readily available within 72 hours.

Article 3 - Benchmark Setters - Those firms that have a submitter to establish a rate now fall under increased MiFID II supervision. Monitoring and recording of communications with other submitters, within the same firm, or others, is now required.

Article 3 - Benchmark Setters - Firms must have programs to be able to detect behavior that may have relevance in terms of setting abuse. Evidence must be readily available to regulatory investigation within 72 hours.

Article 12, Order Instructions - Firm employees are required to follow the handling instructions of orders and executions that are provided when receiving an order. They must follow these directions and make sure the customer receives the best execution. These employees that handling any portion of the trade execution must be monitored and recorded in the event a question should arise on the handling of a customer order, than these can be compared with the actual executions.

Article 12, Order Instructions - Firms require programs to be able to detect behavior that may have relevance in terms of Order Instructions. Evidence must be readily available to regulatory investigation if requested.

Recommendations

With MAR firms must ensure recording of all telephone conversations of regulated employees in front-office (trading floor), back- and middle office, and mobile devices if they are used for trading activities. This can be done with NICE Trading Recording (NTR).

With MAR firms must provide evidence they can detect behavior that may have relevance in terms of market abuse and this evidence must be readily available to regulatory investigation if requested. This can be done with NICE COMPASS and for surveillance with NICE Communication Surveillance.

With MAR firms must be able to reconstruct submissions from all the constituent parts of the submission as and when requested. This can be done with NICE Holistic Surveillance and with NICE Actimize Holistic Behavioral Analytics.