Preparing for MAR

What’s next for the EU Market Abuse Regulation? Anne Kirkwood, professional support lawyer at Herbert Smith Freehills, explains the new technical guidance.

Original news

ESMA clarifies market abuse requirements LNB News 03/02/2015 121

Enhanced disclosure of managers’ transactions under the Market Abuse Regulation (EU) 592/2014 (MAR) is clarified in technical advice submitted to the European Commission by the European Securities and Markets Authority (ESMA). The advice is the first such submission concerning MAR implementation. Other issues addressed include procedures to ensure sound whistleblowing infrastructures and MAR market manipulation indicators. ESMA confirms it will submit the MAR regulatory technical standards in July 2015.

What are the main areas of interest in these recommended technical standards?

The new MAR will introduce a new regime for market abuse in tandem with new rules on the disclosure of inside information, insider lists and restrictions on share dealings by persons discharging managerial responsibilities. ESMA recently published the first of its final reports to the European Commission setting out its recommendations on some of the measures required to implement MAR. This report follows one of the two consultation papers on MAR issued by ESMA in July 2014.

One of the key topics in the final report is share dealings by persons discharging managerial responsibility (PDMRs). A summary of the main points is set out below.

PDMR transactions

Disclosure

The basic concept in MAR regarding disclosure by PDMRs and their connected persons of transactions in securities is the same as it is now under DTR 3, and the definition of PDMRs and connected persons remains the same. However, the scope of transactions to be disclosed has been broadened and the ESMA technical advice provides detail on that scope. The key points in the ESMA response and technical advice are:

• ESMA considers that it must apply a very broad interpretation of MAR’s provisions regarding the types of PDMR (and connected person) transaction which trigger the duty to notify—the current concept that they are limited by reference to transactions which are triggered by the PDMR, or connected person, themselves will not apply, despite the language of ‘own account’ dealings being the same as under the current regime
• there is a very wide ranging, but still non-exhaustive list, of trans