ESMA has recently updated it Question and Answers documents in relation to the Market Abuse Regulation. The following is a summary of the salient points:
Persons professionally arranging or executing transactions: this category is not only limited to firms or entities providing investment services under MiFID but includes buy side firms, such as investment management firms, as well as firms professionally engaged in trading on own account. Non-financial firms producing goods and/or services that trade on own account in financial instruments as part of their business activities can also fall within this category, provided that they meet certain criteria.
Currency: If the transaction is not carried out in EUR, the official daily spot foreign exchange rate which is applicable at the end of the business day when the transaction is conducted is to be used to determine whether the EUR 5000 threshold under Article 19(8) MAR is reached.
Price of Options: In relation to the notification of options granted for free to managers or employees, the price to consider for the purposes of the threshold calculation shall be based on the economic value assigned to the options by the issuer when granting them. On the other hand, if such economic value is unknown, the price should be based on a generally accepted option pricing model.
Closely Associated Persons: The Q&A clarifies that the reference to the ‘managerial responsibilities of which are discharged’ in Article 3(1)(26)(d) of the Market Abuse Regulation (MAR) covers those cases where a person discharging managerial responsibilities within an issuer or a closely associated natural person takes part in or influences the decisions of another legal entity to carry out transactions in financial instruments of the issuer. A legal entity should not be subject to the notification obligations under Article 19(1) of MAR, unless it is directly or indirectly controlled by, is set up for the benefit of, or its economic interests are substantially equivalent to those of that person.
Market Sounding: According to Article 11(1) of MAR, a market sounding comprises of the communication of information, prior to the announcement of a transaction, in order to gauge the interest of potential investors in a possible transaction in a financial instrument. The latter must be covered by the scope of the Regulation and includes financial instruments admitted or requested to be admitted on a regulated market, a multilateral trading facility or organised trading facility.
Financial instruments which influence the price or value of any of the foregoing financial instruments is also covered by this scope. This relationship is determined on a case by case basis, considering other financial instruments of the issuer or of a parent company.
Subject of the insider list requirements: In relation to whether persons acting on behalf or account of the issuer are subject to draw up, update and provide to the NCA their own insider list, this Q&A clarifies that any person who has access to inside information relating to the issuer such as advisors and consultants are subject to such obligation.
Issuer’s responsibility in case of delegation: The issuer remains responsible for the compliance with the insider list requirements by persons acting on his behalf only where a services provider assumes the task of drawing up and updating the insider list of the issuer, based on a specific delegation to that purpose. However, this obligation does not subsist where such persons are personally responsible to draw up, update and provide their own insider list.