Market Abuse Directive

EU legislation The Market Abuse Directive (MAD) is a European Union (EU) legislation that aims to prevent and detect market abuse in the financial markets. It was enacted in 2003 and later revised in 2014, making it a key component of the EU's efforts to regulate and maintain fair and transparent financial markets. The MAD applies to all financial instruments listed on an EU regulated market, including stocks, bonds, derivatives, and commodities. History Market abuse, which refers to activities that distort the market and harm its integrity, has been a growing concern for regulators and investors around the world. The lack of clear regulations and the rise of complex financial instruments have made market abuse more widespread and harder to detect. As a result, the EU introduced the MAD in 2003 to establish a uniform set of rules for financial markets within its member states. In 2014, the EU revised the MAD to strengthen its provisions and align it with the international standards set by the Committee of European Securities Regulators (CESR) and the International Organization of Securities Commissions (IOSCO). The revised MAD, also known as MAD II, became effective in July 2016.[c