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Market Abuse Regulations

Market Abuse Regulations

Tuesday 15th March 2016

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AIM High - Issue 12

In Issue 10 we referred to the Market Abuse Regulations (MAR) (which will come into force on 3 July 2016) and the impact that they will have in respect of the disclosure of price sensitive information. The MAR will also have other implications for AIM companies. 

AIM companies should note that the MAR will have direct effect so there is no need for UK legislation to implement the new rules, and no scope for them to be tailored to local markets. They should start preparing for the coming changes. 

Insider lists

Under the MAR, AIM companies will, for the first time, be required to keep, and update, insider lists containing the detailed information on each individual on that list set out in the template provided by the European Securities and Marketing Authority (ESMA) in its final report on technical standards under the MAR published on 28 September 2015. You can read the report here.

The details required by the MAR are much more extensive than those required on insider lists prepared under the Market Abuse Directive (which applied to Main Market companies). Whilst it is possible that AIM companies may be permitted to keep insider lists in less extensive form, any such change will not take place until 2017 at the earliest.

PDMR transactions

The MAR will also govern the form and content of disclosure of transactions by persons discharging management responsibilities (PDMR’s) and their assistants and again ESMA has provided a template in its final report. The MAR introduces a de minimis threshold of €5,000 within a calendar year below which transactions need not be notified. The Financial Conduct Authority has the option to increase the threshold to €20,000. 

It remains to be seen what changes the London Stock Exchange (Exchange) will propose in respect of AIM Rule 17 and Schedule 5. 

Close periods

The MAR will impose a mandatory close period of 30 calendar days before the announcement of an interim financial report or a year-end report which the issuer is obliged to make public, during which PDMRs are not permitted to deal, subject to very limited exceptions and with the issuer’s approval. 

As it is not compatible with EU law to have domestic rules that conflict or overlap or duplicate EU regulation the FCA will repeal its Model Code, and is proposing to replace it with (as yet unpublished) rules and guidance. The Exchange has not yet indicated what approach it is considering for AIM Rule 21 and the related Guidance Note, but it is hard to see how it can retain the current two month close period. 

Key action points

To prepare for the implementation of and compliance with the new market abuse regime, AIM companies should consider the following:

  • Policies and procedures: updating internal policies and procedures to reflect the new regime.
  • Insider lists: preparing insider lists that comply with the formats to be prescribed by the ESMA (and ensuring that their advisers do the same).
  • Share dealing code: amending their share dealing code to address, among other things, the new de minimis threshold, time period for announcement and permitted dealing windows.
  • Training: briefing directors, other PDMRs, insiders and other relevant employees on their obligations under the new regime. 

If you require further information or guidance in respect of the new regime, or for any AIM matter you have, please contact either: 

Andrew Millar

Partner, Corporate
Tel: 0161 836 8965