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Published date: 13 April 2018

ESMA publishes a negative opinion on an accepted market practice on liquidity contracts proposed by the French AMF

The European Securities and Markets Authority (ESMA) has published today an opinion on the Accepted Market Practice (AMP) notified by the French Autorité des Marchés Financiers (AMF), which replaces the AMP under the Market Abuse Directive (MAD) established in March 2005. 

This AMP refers to liquidity contracts by which a credit institution or an investment firm (financial intermediary) provides quotes at certain French trading venues on behalf of the issuer, with a view to enhancing the liquidity of a particular share and its regular trading.

The regular functioning of this AMP implies that these liquidity contracts should operate according to limits on the resources allocated to them and on the prices and volumes quoted. However, this AMP also foresees that for an initial two-year transitional period both issuers and financial intermediaries may not be bound by those limits in case not defined “market conditions” occur. Contrary to issuers, financial intermediaries are not obl