On July 5, 2016 the City of London Law Society (CLLS) and Law Society Company Law Committees' Joint Working Parties on Market Abuse, Share Plans and Takeovers Code published a Q&A on the Market Abuse Regulation (MAR).
The Q&A sets out a suggested approach to implementing certain aspects of MAR, and provides answers to questions including the following:
PDMR Dealings (Article 19)
- What is the interaction between the MAR closed periods for PDMR dealings in Article 19(11) and the insider dealing offence in MAR Articles 8 and 14?
- Does the FCA’s position on closed periods and preliminary announcements in its statement of 25 May 2016 apply to all issuers, wherever their securities are traded?
- Is the meaning of "transaction" the same for the purposes of Article 19(11) as it is for the purposes of the disclosure requirement in Article 19(1)?
- How do the MAR closed periods affect conditional transactions?
- Is an issuer subject to the MAR closed period?
- What exchange rate should be used for calculating the EUR 5,000 threshold in EU MAR Article 19(8)?
- Can a PDMR acquire shares under a share savings scheme or a dividend reinvestment plan during a MAR closed period?
- Can a PDMR acquire or dispose of shares under a trading plan during a MAR closed period?
- Is the cancellation or surrender of an option (or other right to acquire shares) awarded to a PDMR under an employee share scheme permitted during a MAR closed period?
- I am one of three trustees whose investments include securities of a company of which I am a PDMR. Can the trust deal during a MAR closed period?
Share BuyBacks (Article 5)
- Can an issuer operate a share buy-back programme which does not satisfy the conditions in Article 5 of EU MAR and the Level 2 Regulation?
- Is stake-building permitted (by Article 9(5)) provided the only inside information the bidder has is (i) its intention to bid and (ii) its intention to stake-build?
Disclosure (Article 17)
- What must an issuer do to comply with the Implementing Technical Standards (ITS) for public disclosure of inside information?
- In an announcement containing inside information who should be identified as the person making the notification?
- How may an issuer comply with the requirement for inside information to be located “in an easily identifiable section of the [issuer’s] website”?
- How should an issuer notify inside information when an RIS is not open for business?
Insider Lists (Article 18)
- Which individuals should be included on insider lists for advisers to issuers?
- How do issuers and their advisers complete the national identification number column in the Insider List templates in respect of British and other nationals who do not have national identification numbers?
Investment Recommendations (Article 20)
- If a circular contains a voting recommendation by the board of an issuer, as required by the Listing Rules, does this constitute an “investment recommendation” for the purposes of Article 20 of EU MAR?
- Will the directors’ recommendation of a takeover offer be treated as “an investment recommendation or other information recommending or suggesting an investment strategy” under Article 20?
The Joint Working Parties note that the Q&A is an explanation of how, in their view, MAR should apply to certain practical situations, but is subject to review and amendment in the light of practice on the implementation of MAR and to any relevant future UK or EU guidance published in relation to MAR.
(CLLS, Market Abuse Regulation (EU MAR) Q&A, 05.07.16)