What is a key function of the Market Abuse Regulation?

The Market Abuse Regulation (MAR) plays a crucial role in maintaining the integrity of financial markets by ensuring that all investors have a level playing field. One of its key functions is indeed the extension of insider dealing rules. This means that MAR broadens the scope of what constitutes insider information and the circumstances under which it is illegal to trade based on that information.

By extending these rules, MAR aims to deter insider trading and market manipulation, enhance transparency, and protect the integrity of market operations. It establishes obligations for effective reporting and disclosure practices, helping to restore confidence among investors. This extension is particularly significant because it sends a clear signal that activities that compromise market fairness will be actively monitored and penalized.

In contrast, creating a competitive market environment is more of a general objective of competition law rather than a specific focus of MAR. Encouraging fraudulent activities and restricting market transparency would be contrary to the very purpose of MAR, as it aims to prevent fraud and promote transparency in the markets. Thus, the emphasis on extending insider dealing rules directly aligns with MAR’s objective of combating market abuse and fostering a fair trading environment.