Meeting disclosure requirements under new Market Abuse Regulation31st March 2016
Today we announced that our TIM Ideas platform can solve brokers’ challenges in meeting new capture and disclosure requirements for sales people and sales traders under new Market Abuse Regulations (MAR) due to be implemented on 3 July 2016.
The new MAR standards
In a development that surprised some brokers across Europe, on 10 March 2016 the European Commission endorsed the European Securities and Markets Authority’s (ESMA) technical standards as they apply to sales people and sales traders under Market Abuse Regulation. ESMA had delivered its first set of technical standards relating to MAR on 28 September 2015, which included the objective presentation of investment recommendations and disclosure of particular interests or conflicts of interest.
Under the new standards, all individuals making investment recommendations are classed as “Experts”. When they make investment recommendations sales people and sales traders will now face similar disclosure requirements to research analysts, including disclosure of their 12-month history in any stock they are recommending to a client, and personal or firm holdings in the stock over 0.5%.
The standards are due to come into effect on 3 July 2016. The regulation is documented here: http://ec.europa.eu/transparency/regdoc/rep/3/2016/EN/3-2016-1403-EN-F1-…
TIM Ideas: The ideal compliant solution
TIM Ideas is able to capture all relevant equities-based Investment Recommendation information required by the regulator – including the recording of investment recommendations made through any other media, including telephone, chat and email. (Trade ideas are not inherently Investment Recommendations, but can be if communicated to multiple clients).
We are working with its network of brokers to ensure they are able to continue to provide Investment Recommendations after 3 July. Brokers can choose to link TIM Ideas to existing broker disclosure sites, or to publish internal information, such as company holdings that breach the relevant disclosure limits, to TIM for disclosure on a TIM site on behalf of the broker.
Colin Berthoud, Founding Partner of TIM Group, comments, “TIM Group’s services have always been compliance friendly. For years, we have captured structured recommendations and relayed them to clients that reward broker insight. We believe our Ideas platform provides our brokers with the ideal solution to the new MAR standards for capturing information, and are working with them to link that to existing information disclosure sites.”
As long ago as 2006 the FSA commented on the use of the audit trails created by trade ideas in “Alpha Capture Systems” to be used for compliance purposes. (FSA Market Watch Newsletter, Issue No 17, September 2006).
For more information about the new standards or our MAR solution for sales people and sales traders, please contact us.