Reporting obligation concerning the prevention and detection of market abuse
Under Article 16 of the Market Abuse Regulation (MAR), orders and transactions, including any cancellation or modification thereof, that could constitute insider dealing, market manipulation or attempted insider dealing or market manipulation, shall be reported to the competent authority of the trading venue without delay.
To whom does the reporting obligation under the Market Abuse Regulation apply?
Under Article 16 of MAR, the obligation to report applies to
- market operators
- investment firms that operate a trading venue
- natural or legal persons professionally engaged in the reception and transmission of orders for, or in the execution of transactions in, financial instruments.
‘Market operator’ means exchanges. ‘Investment firm that operates a trading venue’ means an investment firm and credit institution that operates an MTF and an OTF.
Natural or legal persons professionally engaged in the reception and transmission of orders for, or in the execution of transactions in, financial instruments refers to
- credit institutions providing investment services
- investment firms
- Finnish branches of foreign credit institutions providing investment services
- Finnish branches of foreign investment firms providing investment services
- management companies providing investment services
- alternative investment fund managers (AIFMs) providing investment services
- Finnish branches of foreign management companies providing investment services
- natural persons working for the above-mentioned entities.
In its interpretation, the European Securities and Markets Authority (ESMA) considers that the obligation to prevent and detect market abuse or attempted market abuse applies also to buy-side firms, such as investment management firms (AIFs and UCITS managers), as well as firms professionally engaged in trading on own account (proprietary traders).
When and how to report?
Market operators and investment firms that operate a trading venue shall report suspected abuse to the competent authority of the trading venue.
Persons with a reporting obligation who professionally arrange or execute transactions shall be subject to the reporting rules of the Member State in which they are registered or have their head office, or, in the case of a branch, the Member State where the branch is situated.
Suspected market abuse must be reported to the FIN-FSA using the form below and by sending it via secure email to the address STOR(at)finanssivalvonta.fi.
Epäilyttävien toimeksiantojen tai liiketoimien ilmoituslomake (suomeksi, pdf)
Anmälningsblankett för misstänkta handelsorder eller transaktioner (på svenska, pdf)
Reporting form for suspicious transactions or orders (in English, pdf)
Under Article 16 of the MAR, market operators and investment firms that operate a trading venue and persons professionally arranging or executing transactions shall establish and maintain effective arrangements, systems and procedures to prevent and detect insider dealing, market manipulation and attempted insider dealing and market manipulation.
Under Article 2 of Commission Delegated Regulation (EU) 2016/957, the said arrangements, systems and procedures shall be appropriate and proportionate in relation to the scale, size and nature of the operator’s business activity. They shall, however, enable effective and on-going monitoring and analysis, for the purposes of detecting and identifying orders and transactions that could constitute market abuse, of all orders received and transmitted and all transactions executed. The arrangements, systems and procedures shall also produce alerts on events where there is reasonable suspicion of market abuse.
The appropriateness and adequacy of the arrangements, systems and procedures shall be assessed regularly, at least through an annually conducted audit. In addition, parties with a reporting obligation shall ensure that the arrangements, systems and procedures, including any changes or updates to them, are documented in writing.
The submission of a suspicious transaction and order report (STOR) shall not be disclosed to the person in respect of which the STOR was submitted and anyone who is not required to know about the submission of the STOR.