Originally published by FinTech Global
ESMA’s recent MAR Review acknowledged there were varying views on pre-hedging. Eventus has explored whether pre-hedging counts as market manipulation.
As a follow-up to its Review, the regulator is now analysing the practices of pre-hedging and will issue a call for evidence.
Eventus stated that during the review, ESMA alerted market participants that some national competent authorities had received suspicious transactions and order reports (STORs) on pre-hedging behaviour. This is a practice not defined in EU law. From this, mixed opinions were given as to the usefulness of pre-hedging and the risks associated with this practice.