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Summaries of MAR

The Market Abuse Regulation (MAR) and MAD II  come into effect on the 3rd July, which is 6 weeks away. From that date, the provisions of the original Market Abuse Directive(MAD) are extended in several respects. The commodities and energy sector are impacted by the extension  as well, especially since the legislation makes explicit reference to physical spot commodity trades. It also includes a requirement for “effective monitoring” that is more widely defined than under REMIT. MAR generally covers:

  1. Contracts on Regulated Markets and Multilateral Trading Facilities (MTF)
  2. OTC derivatives which may influence the prices of 1.
  3. Spot commodity trading that could influence the prices of  1.

This post on the ICIS Regulation Portal gives a high level overview of the requirements, looking at various aspects of the rules.

This post by PWC looks at a few of the implications of the regulations.

In general, the commodities and energy sector is seeing an increased need to improve monitoring processes and technology. This stems not only from the MAR rules, but also because of REMIT, which outlaws market manipulation. The start of data collection several weeks ago means that National Regulatory Authorities together with ACER now have data about participants’ activities. This,  a recent large fine to Iberdrola, a thematic review from the FCA and a letter from Ofgem, is focussing the efforts of many market participants.

About avivhandler

Aviv is the Managing Director of ETR Advisory, a niche consultancy focused on the regulation of the commodity, energy and financial markets. He has more than 23 years of experience in the financial, energy and commodity markets, covering regulatory compliance, credit, risk and financial technology. Prior to founding ETR, he was Partner at SunGard Global Services, where he built a Centre of Excellence in European Energy and Commodity Regulation. Before that, he founded Coherence, a consulting firm specializing in credit risk in commodity and energy trading as well as software product management. The credit practice ultimately became part of Sirius Solutions, where he was the Managing Director of Europe. He has also held management roles at KWI and Iris Financial, among other organizations. Mr. Handler holds a degree in computer science from Imperial College, University of London.


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