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MAR strengthens the previous market abuse framework by extending its scope to new markets, new platforms and new behaviours. It contains prohibitions of insider dealing, unlawful disclosure of inside information and market manipulation, and provisions to prevent and detect these.
The definition of ‘inside information’ is broadly unchanged in MAR from the previous definition, but is wider to capture inside information for spot commodity contracts. There is also a new definition of inside information for emission allowances and auction products based on these.
MAR clarifies that the use of inside information to amend or cancel an existing order constitutes insider dealing. It also prohibits persons in possession of insider information from using that information to deal or attempt to deal in financial instruments or to recommend or induce another person to transact on the basis of inside information.
MAR introduces a framework to make legitimate disclosures of inside information in the course of market soundings. Provided certain requirements are met, disclosing market participants are protected from an allegation of unlawful disclosure of inside information.
MAR defines and prohibits market manipulation. This offence has been extended to capture attempted manipulation, benchmarks and in some situations spot commodity contracts.
MiFID II is considerably broader than its predecessor and makes sweeping changes to pre- and post-trade transparency in addition to extending instrument coverage and trading venues (once MiFID II is implemented, MAR will harmonise with this extended instrument coverage). Best execution requirements within MiFID II include the need to demonstrate ‘sufficient efforts’.