ESMA Does Not Find Evidence To Ban Pre-Hedging But Warns On Risks

ESMA concludes that pre-hedging is a voluntary market practice which might give rise to conflicts of interest or abusive behaviours. Whereas ESMA does not find arguments to ban this practice at this stage, it also flags that these risks should be considered when issuing any future guidance.

ESMA committed to provide guidance on pre-hedging in the Final Report on the Market Abuse Regulation review.

Next steps

ESMA will promote and contribute to the development of global regulatory principles applicable to pre-hedging. Those principles could serve as a basis for the development of any future ESMA guidance.