On Friday 13 April, the European Securities and Markets authority (ESMA) published a negative opinion on plans by the French Autorité des Marchés Financiers (AMF) to introduce a new accepted market practice governing liquidity contracts.
In accordance with the European market abuse regulation, the AMF notified ESMA of a market practice project on 6 February, explaining that it aimed to ensure a careful transition over the next two years of the current practice of liquidity contracts between investment services providers and issuers.
Although ESMA does not object to the regular functioning of this practice, which is widespread in France, it considers that the two-year transition period proposed, during which liquidity contracts will be able to function outside the limits set in place in terms of resources, prices and volume and, in the case of financial intermediaries, without providing transparency to the market, would not meet the requirements set out by the regulation.
In a press release, the AMF states that it takes note of ESMA’s opinion and regrets that it is negative, coming at a time when all efforts must be made to encourage medium-sized businesses to become listed on the financial markets.
The French authority now intends to consider its next steps. If it decides to go against the ESMA opinion, it would be required to publish a detailed opinion on this decision. (Original version in French by Marion Fontana)