Market Abuse Regulations

Stephen Walsh & Co. provide expert advice on all matters relating to Article 19 of MAR, which is the notification requirement to the Central Bank for Persons Discharging Managerial Responsibilities (PDMR) and Persons Closely Associated (PCA). Reporting responsibilities now fall on the individual PDMR/PCA as well as additional obligations on the Issuer company. While in appearance MAR may appear a straight forward process, its scope impacts a wider number of individuals and entities than its predecessor
Just two example of its expanded scope:
• Directors of listed funds trading in listed share classes or in some cases unlisted share classes;
• PDMRs or PCAs trading in the issuer’s shares via a trust or companies related to them.

Stephen Walsh & Co. provide the following services for issuers\PDMRs and PCAs and may be of particular benefit to Enterprise Securities Market (ESM) companies who now fall under the scope of MAR who require advice on their obligations or wish to outsource all their PDMR requirements.
• Assisting Issuers on the designation of PDMRs and related PCA’s
• Registration of PDMRs\PCAs on the Central Bank’s Online Reporting System (‘ONR’)
• Notification to the Central Bank of all Manager/PCA transactions.
• Public notification of reportable transactions to the appropriate wire service on behalf of Issuers (e.g. RNS)
• Advice on all MAR related communications with the Central Bank of Ireland, its reviews or enforcement actions.

The Market Abuse Regulation is now fully in force with effect from 3rd July 2016 across EU Member states. The new rules are important to listed companies and those involved with issuers such as Directors and other parties involved in transactions such as shares and bonds. The new regime consists of the Market Abuse Regulation (The MAR) and a Directive on criminal sanctions for market abuse (MAD 11).

The updated regulation create a more uniform EU-wide legal framework for the prevention of insider dealing, unlawful disclosure of inside information and market manipulation. The introduction of the regulations forms part of the European regulatory reform agenda for financial services, aimed at ensuring greater transparency and market integrity. It strengthens the legal framework underpinning the function of detecting, sanctioning and deterring market abuse. It extends its scope to apply to new markets, new trading platforms and new behaviours and to cover a broader range of financial instruments.

Manager Transactions

Persons discharging managerial responsibilities (PDMR) and persons closely associated with them (e.g. spouses) must notify the issuer of relevant personal transactions they undertake in the issuer’s financial instruments. The obligation to disclose managers‘ transactions is now extended to financial instruments traded on an MTF or OTF. A reduced notification period of three business days is also imperative; the disclosure requirement also includes trading with derivatives and debt securities. An announcement by the issuer has to be distributed throughout Europe, sent to the financial authority and stored in the OAM.

Managers’ transactions announcements now also have to contain the Legal Entity Identifier (LEI code) of the issuer. In addition, issuers must draw up a list including all persons bound by Directors’ Dealings (including closely associated persons).

Market Abuse Regulation (The MAR) introduces a number of changes including:

  • A broadening of the scope of legislation to include trading platforms, such as Multilateral Trading Facilities (MTFs), and Over the Counter (OTC) trades, including in derivatives.
  • Additional notification requirements in relation to suspicious activity, delay in the disclosure of inside information, managers’ transactions and
  • Enhanced requirements regarding the preparation and maintenance of insider lists and the handling of inside information.

The Market Abuse Directive (MAD 11) introduces:

  • Minimum rules for criminal sanctions for market abuse, and
  • Wider range of activities which constitute an offence, to include, for example, inciting, aiding and abetting the commission of certain market abuse offences

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