REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL The International Treatment of Public Bodies Charged with, or Intervening in, Public Debt Management and of Central Banks in Third Countries under Regulation (EU) No 596/2014 on Market Abuse
Date: 2015-12-16
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: central bank, comparative analysis, financial control, public debt, public institution, third country

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 16.12.2015  COM(2015) 647 final   REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL The International Treatment of Public Bodies Charged with, or Intervening in, Public Debt Management and of Central Banks in Third Countries under Regulation (EU) No 596/2014 on Market Abuse  
 
 
1.  INTRODUCTION 

Article 6(1) of Regulation (EU) No 596/2014 on market abuse (hereinafter: "MAR")1 exempts 
Member States, including members making up the federation in the case of a Member State 
that is a federal state, members of the European System of Central Banks (ESCB), ministries 
and other agencies and special purpose vehicles of one or several Member States or persons 
acting  on  their  behalf  from  the  application  of  MAR  to  transactions,  orders  or  behaviour 
insofar  as  they  are  undertaken  in  pursuit  of  monetary,  exchange  rate  or  public  debt 
management policies. 

Such an exemption from the scope of MAR may, in accordance with Article 6(5) of MAR, be 
extended by virtue of the Commission's delegated act in accordance with Article 35 of MAR 
to  certain  public  bodies  charged  with,  or  intervening  in,  public  debt  management  and  to 
central banks of third countries.  

This report assesses the international treatment of public bodies charged with, or intervening 
in,  public  debt  management  and  of  central  banks  in  third  countries  with  the  purpose  of 
evaluating the appropriateness of the extension of the abovementioned exemption.   

2.  THE REPORT'S LEGAL BASIS 

Article  6(5)  subparagraph  2  of  MAR  requires  that  by  3  January  2016  the  Commission 
prepares  and  present  to  the  European  Parliament  and  to  the  Council  a  report  assessing  the 
international  treatment  of  public  bodies  charged  with,  or  intervening  in,  public  debt 
management  and  of  central  banks  in  third  countries.  In  terms  of  content,  Article  6(5) 
subparagraph 3 of MAR sets out that the Commission's report should include a comparative 
analysis of the treatment of those bodies and central banks within the legal framework of third 
countries,  and  the  risk  management  standards  applicable  to  the  transactions  entered  into  by 
those bodies and central banks in those jurisdictions. In addition, Article 6(5) subparagraph 3 
of  MAR  requires  that  if  the  report  concludes,  in  particular  in  regard  to  the  comparative 
analysis,  that  the  exemption  of  the  monetary  responsibilities  of  those  third-country  central 
banks  from  the  obligations  and  prohibitions  of  MAR  is  necessary,  the  Commission  should 
extend the abovementioned exemption also to the central banks of those third countries. 

3.  ESMA'S TECHNICAL INPUT AND JURISDICTIONS CONSIDERED 

Given  the  global  nature  of  financial  markets  and  differences  of  legal  frameworks  of  third 
countries  and  of  the  risk  management  standards  applicable  to  the  transactions  across  third 
country  jurisdictions, on 21 October 2013 the Commission  has  requested ESMA to identify 
the most relevant third country jurisdictions to be assessed. In drawing up these lists of third 
countries,  the  Commission  invited  ESMA  to  take  into  account  input  from  competent 
authorities  and  market  participants,  where  appropriate,  and  for  the  list  of  priority  third 
countries,  to  consider  only  those  countries  with  a  significant  volume  of  transactions  within 

1   Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market 
abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the 
Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173, 12.6.2014, p. 
1). 

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scope  of  MAR.  On  25  November  2013,  ESMA  provided  the  Commission  with  a  technical 
input containing criteria for determining a prioritised and nominative list of third countries. In 
addition,  ESMA  has  provided  the  Commission  with  recommendations  in  relation  to  the 
setting up of a selection procedure and to the elements for consideration in the third country 
assessment to be conducted.  

For the purposes  of evaluation of third countries,  ESMA considered appropriate to consider 
and rely upon the International Monetary Fund's (IMF) methodology identifying jurisdictions 
with  a  systemically  important  financial  sector  for  which  the  IMF's  Financial  Sector 
Assessment Program (FSAP) is mandatory. In ESMA's view, the IMF methodology combines 
the  size  and  interconnectedness  of  each  country’s  financial  sector  and  hence  takes  into 
consideration the financial markets dimension. According to the IMF, this group of countries 
covers almost  90%  of the global financial  system and 80%  of global economic activity and 
includes the majority of the G20 countries and of members of the Financial Stability Board 
(FSB).  Moreover,  ESMA  has  applied  two  additional  criteria:  first,  being  on  the  Financial 
Action  Task  Force  (FATF)  list  of  "High-risk  and  non-cooperative  jurisdictions"  which 
identifies  countries  that  have  strategic  deficiencies  in  their  measures  to  fight  against  money 
laundering  and  terrorist  financing  and  second,  not  being  a  signatory  of  IOSCO  Multilateral 
Memorandum of Understanding (MMoU). 

When  excluding  members  that  are  EU  and  EEA  countries  and  including  Turkey  as  an  EU 
candidate  country  in  the  study,  the  Commission  produced  a  list  comprising  13  jurisdictions 
(Australia, Brazil, Canada, China, Hong Kong SAR, Japan, India, Mexico, Singapore, South 
Korea, Switzerland, Turkey and the United States). The Commission has decided to focus in 
its Report on those jurisdictions as a priority in order to decide on the appropriateness of the 
extension of the exemption from the obligations and prohibitions of MAR. 

4.  EXTERNAL STUDY 

In  order  to  carry  out  a  comprehensive  assessment  of  the  international  treatment  of  public 
bodies  of  third  countries,  the  preparation  of  the  evaluation  has  been  commissioned  to 
independent contractors, the Centre for European Policy Studies (CEPS) and the University of 
Bologna  (hereinafter:  "External  Contractors").  On  12  June  2015,  the  External  Contractors 
have delivered to the Commission the report entitled "Study on exemptions for third-country 
central  banks  and  other  entities  under  the  Market  Abuse  Regulation  and  the  Markets  in 
Financial  Instruments  Regulation"  (hereinafter:  "External  Study")  For  the  purposes  of 
conducting  the  External  Study,  the  External  Contractors  carried  out  a  survey  and  a 
questionnaire addressed to central banks of third countries, legal and economic research and 
an analysis of the respective data. Furthermore, the External Study was based on an economic 
analysis of central banks and debt management offices’ (hereinafter: "DMO") mandates and 
operational procedures; and on a legal analysis of the market context and the operational and 
legal frameworks applicable to third-country central banks and DMOs.  

In  order  to  assess  the  opportunity  of  granting  and  exemption  to  central  banks  and  DMOs 
concerning MAR requirements, the External Contractors compare the rules applicable in each 
of  the  jurisdictions  considered  with  those  of  MAR.  The  External  Study  set  the  context  and 

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framework for each jurisdiction and identified the level of transparency and protection of the 
system,  and  took  into  account,  among  others,  the  rules  aiming  at  prohibiting  and  punishing 
insider dealing carried out by central banks or DMO staff members, exemption from market 
abuse  regulation  for  monetary,  exchange-rate  or  public  debt  management  policy  carried  out 
by  the  central  banks  or  DMOs  and  staff  rules  of  conduct  on  the  use  of  confidential 
information, on transactions in assets for private interests and on independence and conflicts 
of interest.  

5.  JURISDICTION ANALYSIS 

Taking  into  account  the  empowerment  provided  by  Article  6(5)  of  MAR  concerning  the 
preparation of the present Report, the comparative analysis of the identified jurisdictions is by 
no  means  exhaustive  and  is  based,  in  particular,  on  the  analysis  of  the  internal  rules  of 
conduct and/or ethics applicable to central banks and DMOs, on rules restricting personal use 
of  confidential  information,  trading  of  assets  by  staff  members  on  their  own  account, 
measures  promoting  staff  independence,  as  well  as  risk  management  standards  and  rules  of 
conduct  and/or  ethics  made  applicable  to  staff  members,  and  availability  of  effective 
enforcement by internal compliance.2 

  Australia 

Reserve Bank of Australia: Insider dealing, unlawful disclosure of inside information and all 
forms of market manipulation are prohibited and constitute both administrative and criminal 
offences.  The  Reserve  Bank  of  Australia  (RBA)  is  not  formally  exempt  from  the  rules  on 
insider dealing, unlawful disclosure of inside information or market manipulation. Likewise, 
no exemption is provided for third-country central banks. The RBA applies risk management 
standards  in  undertaking  its  operations.  Staff  members  are  subject  to  a  duty  of  professional 
secrecy  under  several  legal  provisions  and  the  applicable  internal  code  of  conduct  and  are 
prevented from active trading in financial instruments for personal purposes. In addition, staff 
members  are  required  to  preserve  their  independence  from  third-party  interests,  and  must 
avoid conflicts of interest. Staff members are made aware of the existence and applicability of 
an internal code of conduct upon recruitment and are examined on a continuous basis on the 
knowledge  they  have  of  it.  Depending  on  the  seriousness  of  the  misconduct,  disciplinary 
actions may, depending on the gravity, be up to the termination of employment.  

Australian Office of Financial Management: Staff members of the DMO are subject to the 
relevant  rules  on  insider  dealing,  unlawful  disclosure  of  inside  information,  and  market 
manipulation.  Neither  the  DMO  nor  third  country  DMOs  are  exempt  from  rules  on  insider 
dealing, unlawful disclosure of inside information or market manipulation. Staff members are 
bound  by  general  regulations  that  apply  risk  management  standards  to  government  bodies, 
and  they  have  a  duty  of  professional  secrecy.  They  are  also  prohibited  from  making  use  of 
inside information and prevented from trading in financial instruments issued by the DMO, as 
well  as  they  have  to  preserve  their  independence  from  third-party  interests,  and  avoid 
conflicts  of  interest.  An  internal  compliance  function  is  in  place  to  preside  over  the 

2  

See summary of the analysis and criteria in the Annex of this Report.  

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application  of  the  internal  rules  of  conduct,  investigate  breaches  and  to  report  to  external 
authorities when required. Depending on the seriousness of the case, disciplinary actions may 
vary from reprimand to dismissal. 

  Brazil 

Central Bank of Brazil: Insider dealing, unlawful disclosure of inside information, all forms 
of market manipulation are prohibited and constitute criminal offences. The national central 
bank is not formally exempt from market abuse rules. Likewise, no exemption is provided for 
third-country central banks. The central bank has operational rulebook on the transactions for 
the disposal and acquisition of financial instruments, and effective risk management standards 
are  in  place  and  consistently  applied.  Staff  members  are  subject  to  a  duty  of  professional 
secrecy and are forbidden from making use of inside information for private purposes. While 
no  rules    prohibits  outright  trading  in  predetermined  assets  or  financial  instruments  for 
personal  purposes,  staff  members  must  refrain  from  taking  any  advantage  of  inside 
information or conflict of interests situations arising from their position with the central bank. 
Staff members also have a duty to preserve their independence from third-party interests, and 
must  avoid  conflicts  of  interest.  An  ethics  committee  informs  staff  of  the  rules  of  conduct, 
monitors  their  application  and  takes  disciplinary  actions  in  case  of  violation.  Depending  on 
the severity of the misconduct, disciplinary actions range from warning to dismissal.  

National  Treasury  of  Brazil:  No  exemption  from  rules  on  insider  dealing,  unlawful 
disclosure  of  inside  information  or  market  manipulation  exists  for  the  DMO  and/or  third-
country DMOs. No specific operational rulebook for handling the disposal or acquisition of 
financial instruments exists. Staff members are subject to a duty of professional secrecy under 
several legal provisions and the applicable internal rules of conduct and are prohibited from 
making  use  of  inside  information  for  private  purposes  with  no  exception.  Specific  and 
detailed rules are put in place that explicitly prevent staff members from trading in financial 
instruments  issued  by  the  DMO  or  other  government  entities,  unless  specific  and  stringent 
conditions apply. Staff members are required to preserve their independence from third-party 
interests,  and  to  avoid  conflicts  of  interest.  An  internal  ethics  committee  oversees  the 
application of the internal rules of conduct and takes disciplinary actions in case of violation. 
Depending  on  the  severity  of  the  misconduct,  disciplinary  actions  range  from  warning  to 
dismissal.  

  Canada 

Bank of Canada: Insider dealing, unlawful disclosure of inside information and all forms of 
market manipulation are prohibited and constitute both administrative offences and criminal 
offences,  which  are  subject  to  penalties.  The  national  central  bank  is  not  formally  exempt 
from the rules on insider dealing or unlawful disclosure of inside information, but is exempt 
from rules on market manipulation. No exemption is provided for third-country central banks. 
The  central  bank  applies  risk  management  standards  for  undertaking  its  operations.  Staff 
members  have  a  duty  of  professional  secrecy,  which  prohibits  any  use  and  attempt  to  use 
inside  information  for  private  interests.  Applicable  rules  on  trading  in  financial  instruments 

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for  personal  purposes  are  tailored  to  the  position  of  the  staff  member.  Staff  members  are 
required  to  preserve  their  independence  from  third-party  interests  and  to  avoid  conflicts  of 
interest. A committee designated with the board of directors of the central bank, together with 
the  compliance  office,  oversees  the  administration  of  the  code  of  conduct  and  is  entrusted 
with reviewing it, disseminating knowledge and taking disciplinary action in case of breach of 
it. Depending on the severity of the misconduct, disciplinary actions may include termination 
of employment.  

Department  of  Finance  Canada:  DMO's  staff  members  are  subject  to  insider  dealing, 
unlawful  disclosure  of  inside  information  prohibition  and  all  forms  of  market  manipulation 
and relevant administrative and criminal  penalties. DMO is  not  exempted from the rules  on 
insider dealing and unlawful disclosure of inside information, save for an exemption from the 
rules  on  market  manipulation.  Third-country  DMOs  are  not  exempt  from  such  rules.  The 
same risk management standards apply as to the central bank. Staff members are subject to a 
duty  of  professional  secrecy  and  are  prohibited  from  making  use  of  inside  information  for 
private purposes with no exception. Staff members are prevented from investing in financial 
instruments  that  give  rise  to  actual  or  potential  conflicts  of  interest.  Furthermore,  staff 
members are subject to independence duty and are required to avoid conflicts of interest. An 
internal compliance function is in place to preside over the application of the internal rules of 
conduct, the adherence to which is part of the employment contract, investigate instances of 
misconduct and report such instances of misconduct to external authorities.  

  China 

People's Bank of China: Staff members of the central bank are subject to all the rules that 
prohibit insider dealing, unlawful disclosure of inside information, and market manipulation 
and such breaches resulting in either administrative and/or criminal offences. The central bank 
is  exempt  from  the  rules  on  insider  dealing,  unlawful  disclosure  of  inside  information  and 
market manipulation. However, no such exemption applies to third-country central banks. The 
central  bank  applies  general  and  specific  risk  management  standards  when  it  undertakes  its 
operations. Compliance with such standards is routinely checked by the internal compliance 
and audit. Staff members are subject to a stringent duty of professional secrecy, which applies 
beyond the term of employment. Staff members are also prohibited from making use of inside 
information  for  private  purposes  with  no  exception.  Restrictions  in  investing  and  holding 
assets  and  financial  instruments  apply.  Staff  members  have  a  duty  to  preserve  their 
independence  from  third-party  interests,  and  to  avoid  conflicts  of  interest.  An  internal 
compliance  function  is  in  place  in  order  to  oversee  the  application  of  the  internal  rules  of 
conduct. Depending on the severity of the misconduct, disciplinary actions may be up to and 
include dismissal.  

  Hong Kong 

Hong Kong Monetary Authority: Insider dealing, unlawful disclosure of inside information, 
all  forms  of  market  manipulation  are  prohibited  and  constitute  both  administrative  offences 
and criminal offences and are subject to penalties. Since the Hong Kong Monetary Authority 

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belongs to the executive branch there is only a de facto exemption from the rules on insider 
dealing, unlawful disclosure of inside information and market manipulation. No exemption is 
provided  for  third-country  central  banks.  Hong  Kong  Monetary  Authority  applies  risk 
management  standards  and  observes  an  internal  investment  policy  and  procedures  manuals 
when it undertakes its operations. Staff members are subject to a duty of professional secrecy, 
which  is  enforced  under  several  legal  provisions  and  are  prohibited  from  using  inside 
information in their own private interest. Staff members are prohibited to invest in financial 
instruments  issued  by  regulated  entities  and  are  required  preserve  their  independence  from 
third-party interests and to avoid conflicts of interest. The management and human resources 
department presides over the application of the internal code of conduct endorsed by outside 
regulatory authorities. Depending on the severity of the misconduct, disciplinary actions may 
be up to and include termination of employment.  

Financial  Services  and  the  Treasury  Bureau  of  Hong  Kong:  Insider  dealing,  unlawful 
disclosure  of  inside  information  and  all  forms  of  market  manipulation  are  prohibited  and 
constitute  both  administrative  offences  and  criminal  offences,  and  are  subject  to  penalties. 
The DMO is de facto exempt from the rules on insider dealing, unlawful disclosure of inside 
information and market manipulation. No exemption provided for third-country DMOs.  Staff 
members  are  subject  to  a  duty  of  professional  secrecy  and  are  prohibited  from  using  inside 
information  in  their  own  private  interest.  Staff  members  must  not  engage  in  private 
investments  which  may  cause  real  or  apparent  conflicts  of  interest  with  their  official  duties 
and must preserve their independence from third-party interests, and must disclose conflicts of 
interest to their supervisors. Depending on the severity of the misconduct, disciplinary actions 
may vary from verbal or written warning to compulsory retirement or dismissal. 

  India  

Reserve Bank of India: Insider dealing, unlawful disclosure of inside information, all forms 
of  market  manipulation  are  prohibited  and  constitute  both  administrative  offences  and 
criminal offences, each one subject to ad hoc penalties. Reserve Bank of India is exempt from 
the  rules  on  insider  dealing,  unlawful  disclosure  of  inside  information  and  market 
manipulation. No exemption is provided for third-country central banks and DMOs. Reserve 
Bank of India applies risk management standards in undertaking its operations and their mode 
of  application  has  been  sufficiently  disclosed.  Staff  members  are  subject  to  a  duty  of 
professional  secrecy  under  several  legal  provisions.  Rules  exist  that  explicitly  prevent  staff 
members  from  speculative  trading  in  financial  instruments.  Staff  members  are  subject  to  a 
duty to preserve their independence from third-party interests. However, there is no specific 
internal  policy  aimed  at  addressing  issues  of  conflict  of  interests.  Concerning  the  rules  of 
conduct the oversight function falls on  each line manager. Depending on the severity of the 
misconduct, disciplinary actions may be up to or even result in termination of employment.  

  Japan 

Bank  of  Japan:  Insider  dealing,  unlawful  disclosure  of  inside  information,  all  forms  of 
market manipulation are prohibited and constitute both administrative offences and criminal 

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offences,  each  one  subject  to  ad  hoc  penalties.  The  national  central  bank  is  not  formally 
exempt from the rules on insider dealing, unlawful disclosure of inside information or market 
manipulation.  Likewise,  no  exemption  is  provided  for  third-country  central  banks.    Staff 
members are subject to a duty of professional secrecy, which lasts for life. Staff members are 
prohibited  from  making  use  of  inside  information  for  private  purposes  and  from  dealing  in 
financial instruments. Staff members are subject to a duty to preserve their independence from 
third-party  interests,  and  they  must  also  avoid  conflicts  of  interest.  A  central  authority,  the 
National  Public  Service  Ethics  Board,  is  entrusted  with  advising  on  changes  to  the  national 
ethics  framework  for  public  employees.  Depending  on  the  severity  of  the  misconduct, 
disciplinary actions may vary from warning and pay cut to termination of employment.  

Ministry of Finance: Insider dealing, unlawful disclosure of inside information and all forms 
of  market  manipulation  are  prohibited  and  constitute  both  administrative  offences  and 
criminal offences, and subject to penalties. Staff members are subject to a duty of professional 
secrecy,  which  lasts  for  life.  Staff  members  are  prohibited  from  making  use  of  inside 
information  for private purposes  and from dealing in  government bonds. Staff  members are 
subject  to  a  duty  to  preserve  their  independence  from  third-party  interests.  The  National 
Public  Service  Ethics  Board  is  entrusted  with  advising  on  changes  to  the  national  ethics 
framework for all public employees. Depending on the severity of the misconduct disciplinary 
actions may vary from warning and pay cut to termination of employment. 

  Mexico 

Bank of Mexico: Insider dealing, unlawful disclosure of inside information and all forms of 
market  manipulation  are  prohibited  as  criminal  offences  and  are  subject  to  the  penalty  of 
imprisonment. The national central bank is formally exempt from the rules on insider dealing, 
unlawful disclosure of inside information and market manipulation. No exemption is provided 
for  third-country  central  banks.  The  central  bank  applies  risk  management  standards  in 
undertaking its operations and its means of implementation have sufficiently been disclosed. 
Staff members are subject to a duty of professional secrecy, which continues beyond the term 
of  employment.  Rules  exist  that  explicitly  prevent  staff  members  from  dealing  in  financial 
instruments for a price openly uncorrelated to the fair market price. Staff members are subject 
to a duty to preserve their independence from third-party interests, and they must also avoid 
conflicts of interest. The internal function in charge of supervising compliance with the rules 
of conduct is articulated in several committees and departments. Depending on the severity of 
the misconduct, disciplinary actions may vary from warning and suspension to removal, and 
temporary disqualification from holding analogous positions. 

Ministry of Finance and Public Credit of Mexico: Staff members of the DMO are subject 
to the rules on insider dealing, unlawful disclosure of inside information, all forms of market 
manipulation  and  relevant  criminal  penalties.  No  exemption  from  rules  on  insider  dealing, 
unlawful disclosure of inside information or market manipulation is provided for the national 
DMO or for third-country DMOs. Restrictions apply on trading in assets. The DMO applies 
risk  management  standards  to  its  operations.  Staff  members  are  subject  to  a  duty  of 
professional  secrecy  and  are  prohibited  from  making  use  of  inside  information  for  private 

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purposes  with  no  exception.  No  specific  rules  exist  that  would  prevent  staff  members  from 
trading in financial instruments issued by the DMO. However, staff members are subject to a 
duty  to  preserve  their  independence  from  third-party  interests,  and  they  must  also  avoid 
conflicts of interest. An ethics committee is in charge of the application of the internal rules of 
conduct.  Depending  on  the  severity  of  the  misconduct,  disciplinary  actions  may  vary  from 
warning to discharge from office and temporary disqualification from holding offices in the 
public sector. 

  Singapore 

Monetary  Authority  of  Singapore:  Insider  dealing,  unlawful  disclosure  of  inside 
information,  all  forms  of  market  manipulation  are  prohibited  and  constitute  both 
administrative  offences  and  criminal  offences,  each  one  subject  to  ad  hoc  penalties.  The 
Monetary  Authority  of  Singapore  is  exempt  from  the  rules  on  insider  dealing,  unlawful 
disclosure of inside information and market manipulation. No exemption is provided for third-
country  central  banks  or  DMOs.  The  Monetary  Authority  of  Singapore  applies  risk 
management  standards  in  undertaking  its  operations  and  compliance  with  such  standards  is 
monitored. Staff members are subject to a duty of professional secrecy under the applicable 
internal  code  of  conduct  and  are  prohibited  from  making  private  use  of  inside  information. 
Staff  members  and  their  family  are  not  allowed  to  hold  financial  instruments  issued  by 
regulated entities and buy listed financial instruments outside public markets. Staff members 
are subject to a duty to preserve their independence from third-party interests, and they must 
also  disclose  conflicts  of  interest  to  the  head  of  department.  The  Monetary  Authority  of 
Singapore's  management,  together  with  the  human  resources  and  risk  management 
departments,  supervise  the  application  of  the  internal  code  of  conduct  and  inform  new  staff 
members  about  it.  Disciplinary  actions  taken  by  the  Monetary  Authority  of  Singapore's 
management range from oral reprimand to termination of employment.  

  Korea 

Bank  of  Korea:  Insider  dealing,  unlawful  disclosure  of  inside  information,  all  forms  of 
market manipulation are prohibited and constitute both administrative offences and criminal 
offences, each one subject to ad hoc penalties, up to life imprisonment. The national central 
bank is not formally exempt from the rules on insider dealing, unlawful disclosure of inside 
information  or  market  manipulation.  Likewise,  no  exemption  is  provided  for  third-country 
central  banks.  The  central  bank  applies  risk  management  standards  in  undertaking  its 
operations. Staff members are subject to a duty of professional secrecy, which may be waived 
for purposes of information sharing with other authorities, and may not use inside information 
for  private  purposes.  Restrictions  in  dealing  in  financial  instruments  only  apply  to  staff 
members with access to critical information. Staff members are subject to a duty to preserve 
their independence from third-party interests and must consult the compliance officer should a 
conflict  of  interest  arise  and  are  excluded  from  participating  in  the  decision.  An  ethics  and 
compliance  officer  is  responsible  for  staff  training  on  the  code  of  conduct  and  monitors 
compliance. Depending on the seriousness of the misconduct, disciplinary actions may result 
in the termination of employment.  

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Ministry of Strategy and Finance of Korea: Staff members of the DMO are subject to the 
rules  on  insider  dealing,  unlawful  disclosure  of  inside  information,  all  forms  of  market 
manipulation and relevant administrative and criminal penalties. No exemption from rules on 
insider dealing, unlawful disclosure of inside information or market manipulation is provided 
for  the  national  DMO  or  for  third-country  DMOs.  Staff  members  are  subject  to  a  duty  to 
preserve their independence from third-party interests, and they must also avoid conflicts of 
interest. A compliance officer is in charge of the application of the internal rules of conduct. 
Depending on the seriousness of the case, disciplinary actions may be taken. 

  Switzerland  

Swiss  National  Bank:  Insider  dealing,  unlawful  disclosure  of  inside  information  and  all 
forms of market manipulation are prohibited and constitute both administrative offences and 
criminal offences, and subject to penalties. The national central bank is formally exempt from 
the  rules  on  insider  dealing,  unlawful  disclosure  of  inside  information  and  market 
manipulation.  To  the  contrary,  no  exemption  is  granted  to  third-country  central  banks.  The 
central bank applies risk management standards in undertaking its operations. Staff members 
are subject to a duty of professional secrecy under the applicable internal code of conduct and 
members  of  the  bank  council  are  held  to  it  beyond  the  term  of  employment.  Private  use  of 
inside  information  is  prohibited.  Staff  members  are  prevented  from  trading  in  financial 
instruments on the basis of inside information and entering into foreign exchange transactions 
exceeding certain monetary threshold unless previously authorised. Staff members are subject 
to a duty to preserve their independence from third-party interests, and they must also avoid 
conflicts of interest. The compliance department presides over the application of the internal 
code  of  conduct  and  is  responsible  for  advisory,  training,  investigation,  monitoring,  and 
reporting. In case of intentional misconduct or gross negligence, disciplinary actions may be 
up to termination of employment.  

Federal  Finance  Administration:  Staff  members  of  the  DMO  are  subject  to  the  rules  on 
insider  dealing, unlawful  disclosure of inside information,  all  forms of  market  manipulation 
and  relevant  administrative  and  criminal  offences.  An  exemption  from  rules  on  insider 
dealing,  unlawful  disclosure  of  inside  information  or  market  manipulation  is  granted  to  the 
national  DMO.  Third-country  DMOs  are  not  exempt  from  such  rules.  Staff  members  are 
subject  to  a  stringent  duty  of  professional  secrecy,  which  continues  beyond  the  term  of 
employment.  They  are  also  prohibited  from  making  use  of  inside  information  for  private 
purposes. There are rules that place restrictions on the transactions in financial instruments by 
staff  members,  who  are  obliged  to  keep  record  and  report  their  investments  upon  request. 
Staff members are subject to a duty to preserve their independence from third-party interests, 
and  they  must  also  avoid  conflicts of  interest.  Line  managers  oversee the  application  of  the 
internal  rules  of  conduct,  the  knowledge  of  which  is  part  of  the  learning  activity  of  staff 
members.  Depending  on  the  seriousness  of  the  case,  disciplinary  actions  may  be  up  to 
dismissal.  

  Turkey 

10 

 
 
Central  Bank  of  the  Republic  of  Turkey:  Insider  dealing,  unlawful  disclosure  of  inside 
information,  all  forms  of  market  manipulation  are  prohibited  and  constitute  both 
administrative  offences  and  criminal  offences,  each  one  subject  to  ad  hoc  penalties.  The 
national  central  bank  is  formally  exempt  from  the  rules  on  insider  dealing,  unlawful 
disclosure  of  inside  information  or  market  manipulation,  however,  no  exemption  exists  for 
third-country  central  banks.  The  central  bank  applies  risk  management  standards  in 
undertaking  its  operations  and  the  implementation  of  such  standards  is  subject  to  auditing. 
Staff members are subject to a duty of professional secrecy, the violation of which constitutes 
a criminal offence. Staff members are prevented from participating in auctions of government 
bonds.  Staff  members  are  subject  to  a  duty  to  preserve  their  independence  from  third-party 
interests,  and  they  must  abstain  from  taking  part  in  decisions  in  relation  to  which  they  are 
conflicted.  The  audit  department  is  in  charge  of  applying  the  internal  rules  of  conduct,  it 
conducts  examination  and  studies,  carries  out  investigations  and  offer  consulting  services. 
Depending  on  the  severity  of  the  misconduct,  disciplinary  actions  may  be  up  to  and  even 
include termination of employment.  

Undersecretariat of Treasury of the Republic of Turkey: Staff members of the DMO are 
subject to the rules on insider dealing, unlawful disclosure of inside information, all forms of 
market  manipulation  and  relevant  administrative  and  criminal  offences.  No  exemption  from 
rules  on  insider  dealing,  unlawful  disclosure  of  inside  information  or  market  manipulation 
exists  for  the  national  DMO  or  for  third-country  DMOs.  Staff  members  are  bound  by  risk 
management standards and are subject to a stringent duty of professional secrecy, as well as 
restricted  from  trading  in  financial  instruments.  In  addition,  staff  members  must  report 
information  about  the  assets  they  and  their  families  own  and  are  required  to  preserve  their 
independence  from  third-party  interests,  and  to  avoid  conflicts  of  interest.  An  ethics 
commission nominated by the DMO management develops an ethical culture, provides advice 
and  monitors  behaviour.  Depending  on  the  severity  of  the  misconduct,  the  council  of  the 
central bank may apply a series of disciplinary actions up to dismissal. 

  USA 

Federal  Reserve  System:  Insider  dealing,  unlawful  disclosure  of  inside  information,  all 
forms  of  market  manipulation  are  prohibited  and  constitute  both  administrative  offences, 
punishable  by  penalties.  The  national  central  bank  is  formally  exempt  from  the  rules  on 
insider  dealing,  unlawful  disclosure  of  inside  information  and  market  manipulation.  No 
exemption  is  provided  for  third-country  central  banks.  The  central  bank  applies  risk 
management standards in undertaking its operations. Staff members are subject to a stringent 
duty  of  professional  secrecy  and  are  prohibited  from  using  inside  information  for  their 
personal benefit. Rules exist that explicitly prevent or restrict staff members from trading in 
financial  instruments  on  the  basis  of  inside  information  around  the  time  the  Federal  Open 
Market  Committee  gathers  and  from  investing  in  the  U.S.  Government  securities.  Staff 
members are subject to a duty to preserve their independence from third-party interests, and 
they  must  also  avoid  conflicts  of  interest.  An  ethics  officer,  a  senior  officer  of  the  central 
bank,  is  responsible  for  implementing  the  central  bank’s  programme  for  maintaining  the 
highest  standards  of  honesty,  integrity  and  impartiality  in  the  conduct  of  central  bank’s 

11 

 
 
activities. Depending on the severity of the misconduct, staff members are subject disciplinary 
action up termination of employment.  

U.S. Department of the Treasury: Insider dealing, unlawful disclosure of inside information 
and all forms of market manipulation are prohibited. Staff members are subject to a stringent 
duty  of  professional  secrecy  and  to  restrictions  on  purchasing  assets  and  holding  financial 
instruments, as well as to extensive rules on financial disclosure. Furthermore, staff members 
are required to preserve their independence from third-party interests, and to avoid conflicts 
of  interest.  The  Deputy  General  Counsel  is  the  Department’s  Designated  Agency  Ethics 
Official  and  is  responsible  for  managing  and  coordinating  the  ethics  program  and  other 
matters  arising  under  the  applicable  internal  rules  of  conduct.  Heads  of  Bureau  take 
appropriate  corrective  and  disciplinary  actions  in  case  of  misconduct  up  to  termination  of 
employment.  

6.  CONCLUSIONS  

At  this  stage,  the  Commission  concludes  that  on  the  basis  of  the  assessment  carried  out 
through the analysis of the key and additional criteria as explained above, it is appropriate to 
grant an exemption from MAR requirements to central banks and DMOs of Australia, Brazil, 
Canada,  Hong  Kong  SAR,  India,  Japan,  Mexico,  Singapore,  South  Korea,  Switzerland, 
Turkey and the United States and to the central bank of China. Hence, a delegated act under 
Article 6(5) of MAR is required to extend the exemption to the abovementioned central banks 
and DMOs. 

The comparative analysis in this Report is by no means exhaustive. It is also based on some 
third-countries' legislation that can be updated. Conclusions set out in this Report are without 
prejudice  to  possible  changes  in  the  future,  having  regard  to  changes  of  third-countries' 
legislation or changed factual circumstances which may trigger the need for a review of the 
list of exempted third country central banks and DMOs. 

12 

 
 
 
  
 
 
ANNEX: COMPARATIVE OVERVIEW OF THIRD COUNTRIES 

Insider 
dealing 
rules 

Inside 
information 
disclosure 
rules  

Market 
manipulation 
rules 

CB/DMO 
exemption  

CB 

Yes 

Yes 

Yes 

No  

Risk-
management 
standards 

Applied but not 
disclosed 

Confidential 
information 

Private 
transactions 
in assets 

Independence 
and conflicts of 
interest 

Enforcement 

Exemption 

PSNPU  

RTHA 

Independence duty 
and avoid conflicts 
of interest 

Internal unit 
enforcing 
actions 

Australia 

Brazil 

Canada 

China 

Hong Kong 
SAR 

DMO 

Yes 

Yes 

Yes  

No 

Applied but not 
disclosed 

PSNPU  

RTHA 

Independence duty 
and DIS 

CB 

Yes 

Yes 

Yes 

No  

Applied and 
disclosed 

PSNPU  

RTHA 

DMO  

Yes 

Yes 

Yes  

No 

CB 

Yes 

Yes 

DMO 

Yes 

Yes 

CB 

Yes 

Yes 

DMO 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

CB 

Yes 

Yes 

Yes 

DMO 

Yes 

Yes 

Yes  

Yes  
(only 
domestic CB)  

No 

Yes  
(only 
domestic CB) 
Not publicly 
available/ 
disclosed 
Yes  
(only 
domestic CB) 
Yes  
(only 
domestic 
DMO) 

PSNPU  

RTHA 

PSNPU  

RTHA 

PSNPU  

RTHA 

PSNPU  

RTHA 

Professional 
secrecy 

Not publicly 
available/ 
disclosed 

PSNPU  

RTHA 

PSNPU  

RTHA 

Applied but not 
disclosed 

Applied but not 
disclosed 

Applied but not 
disclosed 

Applied but not 
disclosed 

Not publicly 
available/ 
disclosed 

Applied but not 
disclosed 

Not publicly 
available nor 
disclosed 

13 

Independence duty 
and DIS 

Independence duty 
and avoid conflicts 
of interest 

Independence duty 
and DIS 

Independence duty 
and avoid conflicts 
of interests  

Independence duty 
and DIS 

Independence duty 

Independence duty 
and DIS 

Independence duty 
and avoid conflicts 
of interests  

Internal unit 
enforcing 
actions 

Internal unit 
enforcing 
actions 
Internal unit 
enforcing 
actions 
Internal unit 
enforcing 
actions 
Internal unit 
enforcing 
actions 
Internal unit 
enforcing 
actions 
Disciplinary 
actions up to 
dismissal 
Internal unit 
enforcing 
actions 

Internal unit 
enforcing 
actions 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

n/a 

Yes 

Yes 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Independence duty 
and avoid conflicts 
of interests 

Independence duty 
and DIS 

Independence duty 
and DIS  

Independence duty 
and avoid conflicts 
of interests 

Independence duty 
and DIS 

Applied but not 
disclosed 

Professional 
secrecy  

RTHA 

Independence duty 

PSNPU   

RTHA 

Independence duty 

India 

CB/ 
DMO 

Yes 

Yes 

Yes 

CB 

Yes 

Yes 

DMO 

Yes 

Yes 

CB 

Yes 

Yes 

Yes 

Yes  

Yes 

Japan 

Mexico 

Yes  
(only 
domestic CB) 

No 

Not publicly 
available/ 
disclosed 
Yes  
(only 
domestic CB) 

Not publicly 
available nor 
disclosed 
Not publicly 
available nor 
disclosed 

Applied but not 
disclosed 

DMO 

Yes 

Yes 

Yes  

No 

Applied but not 
disclosed 

PSNPU  

PSNPU  

RTHA 

PSNPU  

RTHA 

Keep record 
and report 
assets 
holdings/ 
transactions 

Singapore 

CB/ 
DMO 

Yes 

Yes 

Yes  

Yes  
(only 
domestic CB) 

CB 

Yes 

Yes 

Yes 

No  

Applied but not 
disclosed 

Applied but not 
disclosed 

PSNPU  

RTHA 

PSNPU  

RTHA 

South Korea 

Switzerland 

Turkey 

DMO 

Yes 

Yes 

Yes  

No 

Not publicly 
available nor 
disclosed 

Not publicly 
available nor 
disclosed 

RTHA 

Independence duty 
and DIS  

CB 

Yes 

Yes 

Yes 

DMO 

Yes 

Yes 

Yes  

CB 

Yes 

Yes 

Yes 

Yes  
(only 
domestic CB) 
Yes  
(only 
domestic 
DMO) 

Yes  
(only 
domestic CB) 

DMO 

Yes 

Yes 

Yes  

No 

PSNPU  

RTHA 

PSNPU  

RTHA 

Independence duty 
and DIS 

Independence duty 
and DIS  

PSNPU  

RTHA 

Independence duty 
and DIS 

PSNPU  

RTHA 

Independence duty 
and DIS  

Applied but not 
disclosed 

Not publicly 
available nor 
disclosed 

Applied but not 
disclosed  

Applied but not 
disclosed 

14 

Internal unit 
enforcing 
actions 

Disciplinary 
actions up to 
dismissal 
Disciplinary 
actions up to 
dismissal 
Internal unit 
enforcing 
actions 

Internal unit 
enforcing 
actions 

Internal unit 
enforcing 
actions 
Internal unit 
enforcing 
actions 
Internal unit 
enforcing 
actions (no 
dismissal) 
Internal unit 
enforcing 
actions 

Disciplinary 
actions up to 
dismissal 

Internal unit 
enforcing 
actions (no 
dismissal) 
Internal unit 
enforcing 
actions (no 
dismissal) 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CB 

Yes 

Yes 

Yes 

USA 

DMO 

Yes 

Yes 

Yes  

Yes  
(only 
domestic CB) 

Applied but not 
disclosed 

Not publicly 
available/ 
disclosed 

Not publicly 
available nor 
disclosed 

PSNPU  

RTHA 

PSNPU  

RTHA 

Independence duty 
and DIS 

Independence duty 
and DIS 

Internal unit 
enforcing 
actions 

Internal unit 
enforcing 
actions 

Yes 

Yes 

Legend:  

‘CB’ stands for ‘central bank’; 

‘DMO’ stands for ‘debt management office’; 

‘PSNPU’ stands for ‘professional secrecy and no private use’; 

‘RTHA’ stands for ‘restrictions in trading and holding of assets’; 

‘DIS’ stands for ‘disqualification if unavoidable conflict’. 

15