Stabilisation—from 3 July 2016 (Market Abuse Regulation)
Stabilisation—from 3 July 2016 (Market Abuse Regulation)

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Stabilisation—from 3 July 2016 (Market Abuse Regulation)
  • What is stabilisation?
  • Stabilisation—potential offences
  • Stabilisation—safe harbour defence
  • Types of stabilisation activities permitted by the Stabilisation Rules
  • Conditions regarding the stabilisation period
  • Disclosure and reporting conditions
  • Price conditions
  • Ancillary stabilisation conditions
  • Breach of the Rules or Regulations

This Practice Note considers the nature and purpose of stabilisation, the process of stabilisation, the potential offences that may arise when carrying out stabilisation and the safe harbour defence under Regulation (EU) No 596/2014 on market abuse (Market Abuse Regulation) and the Commission Delegated Regulation (EU) 2016/1052 supplementing the Market Abuse Regulation with regard to regulatory technical standards for the conditions applicable to buy-back programmes and stabilisation measures (Buy-back and Stabilisation Regulation). For details of the stamp duty and stamp duty reserve tax implications of a stabilisation transaction see Practice Note: Stamp duty and SDRT implications of stabilisation transactions, including the over-allotment or greenshoe option (a subscription to Lexis®PSL Tax will be required).

Brexit impact

The operation of the UK market abuse regime may be affected by Brexit. For further details of its impact see Practice Note: Brexit—UK listing and prospectus regime. For the purposes of this note, the principal change relates to the amendment of deficiencies in retained EU law relating to market abuse to ensure that it operates effectively in a no deal scenario.

What is stabilisation?

Stabilisation is:

  1. a purchase or offer to purchase securities, or a transaction in associated instruments equivalent to such securities

  2. undertaken by a credit institution or an investment firm

  3. in the context of a significant distribution of the securities

  4. exclusively for supporting the