Europe: Significant Changes Proposed to Market Abuse Regulation in the UK

Apr 11 2023

HM Treasury and the FCA have completed their joint review of the criminal market abuse regime, and published a joint statement on 24 March 2023. Their observations are relevant to both the criminal and civil market abuse regimes in the UK. Most notably:

There are a number of areas where it would be appropriate to update the criminal regime in the UK. Such updates are long overdue, given that the regime has not been materially updated since its introduction.
Reforms to the criminal regime recommended by the 2015 Fair and Effective Markets Review have been accepted. That review recommended expanding the current criminal market abuse framework to cover a wider range of FICC instruments, lengthening the maximum sentence for criminal market abuse offences, and creating a new civil and criminal market abuse regime for spot foreign exchange. The Government is due to lay legislation in relation to this in 2023.
The paper states the Government’s intention to repeal the civil market abuse regime under the EU Market Abuse Regulation, and replace it with UK-specific regulation. The timetable for this is still to be set.

The joint review forms part of the wider post-Brexit reform of the UK’s financial services regulatory regime, known as the Future Regulatory Framework. The Government’s broader approach to the Future Regulatory Framework is discussed in a December 2022 policy statement.