Regulatory Alerts2021-05-31
ESMA Opinion on the AMF's Intended Accepted Market Practice on Liquidity Contracts
The European Securities and Markets Authority issued an opinion on the Autorité des marchés financiers' intended Accepted Market Practice regarding liquidity contracts for French equities. ESMA determined that the proposed practice is compatible with EU market abuse regulations regarding transparency requirements and the submission of detailed reports to the regulator. However, the authority identified significant risks to market integrity, specifically noting that the practice allows for price impacts during auction phases and sets volume limits that exceed ESMA recommendations for liquid and illiquid shares.
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