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Essential Corporate News – Week ending August 5, 2016

Publication August 5, 2016


Welcome to Essential Corporate News, our weekly news service covering the latest developments in the UK corporate world.

LSE: Inside AIM on closed periods and preliminary results under MAR and FAQ on MAR

On August 2, 2016 the London Stock Exchange (LSE) published an edition of Inside AIM in which it noted that AIM Notice 45 endorsed the Financial Conduct Authority’s (FCA) supervisory approach in respect of closed periods and preliminary results under the Market Abuse Regulation (MAR) and confirmed that when the European Securities and Markets Authority (ESMA) provided clarification on this topic, the LSE would review the AIM Rules for Companies (the AIM Rules).

In July 2016, ESMA updated its Q&A on MAR. ESMA’s updated Q&A includes a question on closed periods and preliminary results and mirrors the FCA’s approach. Given the clarification by ESMA, the LSE does not consider it necessary to amend the AIM Rules.

The Inside AIM edition also links to a set of frequently asked questions (FAQ) for AIM companies and their nominated advisers, with regard to the disclosure obligations contained within MAR and the AIM Rules, which were published by the LSE on August 2, 2016.

The specific issues addressed in the FAQ include the following:

  • whether an AIM company will have to deal with two regulators, considering there is overlap between the AIM Rules and MAR;
  • whether compliance with MAR will automatically satisfy the AIM company's obligations under the AIM Rules and vice versa;
  • the definition of a person discharging managerial responsibilities (PDMR) and how a PDMR makes notifications to the FCA;
  • the difference between inside information under MAR and price sensitive information under the AIM Rules;
  • why an AIM company has to have a dealing policy when premium listed companies do not have to have one; and
  • what the LSE considers to be a reasonable and effective dealing policy.

(LSE, Inside AIM: Market Abuse Regulation – Closed periods and preliminary results, 02.08.16)

(LSE, FAQs – The Market Abuse Regulation (MAR), 02.08.16)

FCA: Handbook Notice No. 35

On July 29, 2016 the Financial Conduct Authority (FCA) published Handbook Notice No. 35 which sets out changes made by the board of the FCA to the FCA Handbook under various instruments on June 29, 2016 and July 28, 2016. The instruments include:

  • Listing Rules, Prospectus Rules and Disclosure Guidance and Transparency Rules (Miscellaneous Amendments) Instrument 2016 – this instrument, which follows consultation in Quarterly Consultation Paper 12 (CP16/8): amends the Listing Rules provisions on reverse takeovers to ensure that it is clear that issuers cannot artificially break up a transaction to avoid it being classified as a reverse takeover; prescribes the reporting format for the annual reports on payments to governments prepared in accordance with DTR 4.3A; and amends the Prospectus Rules to reflect recent European Securities and Markets Authority (ESMA) publications. The instrument came into force on July 29, 2016.
  • Enforcement (Market Abuse Regulation) Instrument 2016 – this instrument, which follows consultation in Consultation Paper 16/13 on changes to the Decision Procedure and Penalties Manual and the Enforcement Guide for the implementation of the Market Abuse Regulation (MAR), amends sections of the FCA Handbook and the Enforcement Guide to ensure that the FCA has policies and procedures in place to investigate and impose sanctions for contraventions of MAR. The instrument also aligns (to the extent possible and appropriate) the FCA’s current enforcement policies and procedure with those of MAR. This instrument came into force on July 3, 2016.
  • Supervision Manual (Financial Crime Report) Instrument 2016 – this instrument, which follows consultation in Quarterly Consultation Paper 11 (CP15/42), amends the FCA Handbook to enable the FCA to obtain regular, accurate and consistent data to identify financial crime risk. The data will be collated centrally for multiple supervisory sectors to access, facilitating more effective financial crime supervision. This instrument comes into force on December 31, 2016.

(FCA, Handbook Notice No. 35, 29.07.16)

Takeover Panel: Amendments to Practice Statements and Instrument 2016/1

On July 29, 2016 the Takeover Panel released a statement announcing changes to several Practice Statements as a result of the amendments to the Takeover Code (the Code) made in accordance with the Panel’s July 2016 Response Statement (2016/1) on the communication and distribution of information during an offer.

The Practice Statement changes, which are listed below, will come into effect, together with the Code changes, on September 12, 2016:

  • Practice Statement 1 (Rule 20.1 – Equality of information to shareholders and the policing of meetings) will be withdrawn.
  • Practice Statements 2 (Rule 20.2 – Site visits and meetings with management), 3 (Rule 20.2 – Controlled auctions), 20 (Rule 2 – Secrecy, possible offer announcements and pre-announcement responsibilities), 22 (Irrevocable commitments, concert parties and related matters), 25 (Debt syndication during offer periods), 29 (Rule 21.2 – Offer-related arrangements) and 30 (Rule 20.2 – Information required for the purpose of obtaining regulatory consents) will be subject to minor amendments.

In addition, the Panel’s statement provides that Appendix B of RS 2016/1 and Instrument 2016/1 (by which the amendments set out in RS 2016/1 were given effect) contained an error in relation to the new Rule 20.2(c)(ii) in that the words ‘the financial performance of’ should not have been included. A new instrument (Instrument 2016/5, which supersedes Instrument 2016/1) has been published correcting this error.

(Takeover Panel, Panel Statement 2016/8: Amendments to Practice Statements and Instrument 2016/5, 29.08.16)

(Takeover Panel, Instrument 2016/5 (Instrument 2016/1 Correction): The communication and distribution of information during an offer, 29.07.16)

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