The FCA has confirmed that, as proposed in CP 15/35, it intends to adopt the default threshold of €5,000 per calendar year as the de minimis threshold below which PDMRs will not be required to disclose their transactions pursuant to Article 17 of MAR. It notes that this approach was supported by most respondents and that it has not received evidence of market conditions that would be sufficient justification for setting the threshold at the higher level of €20,000 (as permitted under MAR). The FCA also notes that issuers are able, on a voluntary basis, to continue to disclose all transactions (regardless of the €5,000 threshold) if they wish.
There are a number of areas relating to PDMR dealings where further clarification was requested by respondents to CP 15/35 – these included (amongst other things):
- how the MAR closed period requirements should be interpreted in relation to preliminary results announcements, voluntary quarterly reports and compulsory quarterly reports;
- the difference in scope of transactions that are notifiable under MAR and the scope of restrictions on transactions during MAR closed periods;
- whether clearance to deal is required under MAR for unilateral acts such as gifts and inheritances where the PDMR has no control;
- the exchange rate to be used to determine whether the €5,000 threshold has been reached;
- whether saving schemes/dividend reinvestment plans fall within the category of employee or savings schemes under MAR; and
- whether dealings that have taken place, but not been announced, prior to MAR coming into effect should be disclosed in accordance with the current regime or the new regime.
In the Policy Statement, the FCA notes that these (together with various other issues raised in the responses to CP 15/35) were not part of the original proposals in the consultation. It has not therefore provided a response on these points in the Policy Statement, although it notes that it is considering the appropriate approach and that where it considers it would be appropriate to address any of these matters with further guidance it will endeavour to bring this forward via either European level or domestic guidance.
It is also noted that the FCA will provide details on its website in due course of the forms to be used for disclosure of PDMR dealings.
It is unhelpful that uncertainty remains on the interpretation of a number of aspects of the new regime for PDMR dealings so close to the date on which MAR will come into effect. In particular, the impact of preliminary results announcements needs to be clarified as (depending on the position ultimately taken) this could have an impact on the approach issuers take to the production of prelims as well as on the timing of grants and awards under existing employee share incentive schemes. We would hope that clarification of the scope of PDMR transactions that are subject to notification requirements and closed period restrictions under MAR and, in particular, the treatment of transactions that take place during a closed period but over which a PDMR has no control, will also be addressed as a matter of priority as issuers will need clarity on these areas in order to be able to properly comply with MAR when it comes into effect.
Update: See also the subsequent statement by the FCA made in May 2016 setting out its approach to closed periods and preliminary results under MAR.