When level 1 of the Market Abuse Directive
II was discussed two years ago
was talk of Esma
potentially establishing a massive centralised database for
cross-market monitoring, aka the surveillance beast.
Interestingly, this idea
didn’t make it into the final
MAR text. Instead
it calls on each regulator to have in place the necessary tools
for effective cross-market order book surveillance and to
co-operate with each other.
Also, the European Commission has to
submit a report by June 2019 on the possibility of establishing
a Union framework for cross-market order book surveillance. In
other words, legislators will not consider the surveillance
beast for the next five years.
In the meantime, Esma focuses on
harmonising the record keeping standards under
Mifir which will
certainly simplify any exchange of data amongst competent
That certainly sounds much cheaper
CAT system, estimated in the region of $530 million
(down from previous estimates of $4bn).
Whether Europe sticks with a decentralised
but standardised regime, or moves towards a more centralised
monitoring system, remains to be seen, but given the continuous
stream of new consultations published by Esma this is a
discussion that we can thankfully postpone.