Are you prepared for the new Market Abuse Regulation?

The EU Market Abuse Regulation (“MAR”) will replace the current Market Abuse Directive and expands the scope of the market abuse framework. MAR will come into effect on 3 July 2016.

The FCA issued a separate consultation paper in November 2015, proposing to amend its rules and guidance about delaying disclosure of inside information in the Disclosure and Transparency Rules ("DTR"). This consultation closed on 4 February 2016. The FCA is due to publish its feedback statement in Spring 2016.

What is the objective of MAR?

MAR seeks to increase market integrity and investor protection, while easing a single rulebook and level playing field across the EU; increasing the attractiveness of securities markets for capital raising.

What has changed?

MAR brings changes to the FCA Handbook, including the abolition of of the Model Code which some companies currently rely on as part of their share dealing process, DTRs 2 and 3 are to be replaced by provisions in the MAR, and changes to the Code of Market Conduct.

Key changes include:

  • Extension of the regime to listed companies on non-regulated markets, including the AIM.
  • Increased numbers of financial instruments now caught by MAR.
  • Increased information is required to be held on individuals on each insider list.
  • Notifications process to be followed if delaying the disclosure of inside information.
  • Increased record-keeping and decision-making procedures are required.
  • Tighter deadlines on disclosure of PDMR/directors’ dealings.
  • New definition of close periods.
  • Introduction of a "market soundings" process which permits legitimate disclosure of inside information in certain circumstances.

How will it impact you?

There are a number of steps that listed companies will have to take ahead of 3 July 2016 in order to ensure compliance with MAR these include:

  • identifying and updating policies and procedures for the disclosure of inside information
  • reviewing and updating share dealing codes and processes
  • the impact the new close periods may have on the financial reporting/share dealing timetables
  • preparing new templates for insider lists and establishing processes for maintaining them
  • processes needed to manage the new market sounding regime
  • developing training and awareness programmes for Directors and key employees
  • review of share plan rules, handbooks, employee communications and processes.

This list is non-exhaustive so please take a look at the briefing attached. We can help you comply with your obligations under MAR, so to discuss any concerns you have please contact us.

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