Markets
As a result of the changes, the UK criminal insider dealing offences will apply to securities traded (or which have requested admission to trade) on the following trading venues:
- a UK, EU or Gibraltar regulated market, multilateral trading facility (MTF) or organised trading facility (OTF); and
- any market established under the rules of NASDAQ, SIX Swiss Exchange or the New York Stock Exchange (NYSE).
They will also apply to securities whose price or value is linked to such securities.
The main changes therefore extend the scope of the regime to:
- include MTFs and OTFs which were previously largely out of scope unless they technically operated under the rules of the main exchange (e.g. AIM); and
- include the NYSE.
The inclusion of the NYSE, NASDAQ and SIX Swiss Exchange also means the scope of the criminal regime goes beyond that under the UK Market Abuse Regulation.
Financial instruments
Historically, the criminal insider dealing regime broadly applied to shares and debt securities and certain instruments related to those shares and debt securities (such as warrants, depositary receipts, options, futures and contracts for differences). This has now been extended to apply in respect of all MiFID financial instruments including derivatives, units in collective investment schemes and certain emission allowances. Spot FX remains out of scope but this may change in the future.
Next steps
- Firms should review their policies and procedures including new joiner and periodic training materials. Many firms' policies and procedures will not distinguish in detail between the UK criminal insider dealing regime and the broader civil market abuse regime under the UK Market Abuse Regulation; others are more granular. This will affect the extent of any changes required. However, all firms will need to ensure that their policies and procedures fully reflect the additional trading venues and securities in the criminal regime and, importantly, ensure that these now cover trading on the NYSE which may not have previously been addressed.
- Staff should be notified of the extended scope, in particular in relation to the inclusion of the NYSE.
If you would like further information or assistance in understanding the changes, please speak to your usual Travers Smith contact or any of the individuals below.
