CSA Partners: Compliance Blog

When the logbook goes beyond Facebook / Martin

03/07/2016.

EU legislators have worked hard for several years to “reduce” unnecessary administrative burdens associated with insider lists. And here is what some may call a “remarkable outcome” coming into effect on July 3, 2016 under the new Market Abuse regime:

  • Extension of the obligation to maintain insider lists from the regulated market issuers to issuers whose instruments are traded on MTFs and OTFs;
  • Extensive list of personal data going beyond what is stored in HR systems or data subject’s Facebook account;
  • Great deal of exposure for every entity responsible for maintaining the insider lists to highly demanding requirements of the Regulation (EU) 2016/679 (General Data Protection Regulation, effective May 2018) and sanctioning regime thereunder with administrative fines in the range of EUR 20 000 000;
  • EUR 1 000 000 as administrative pecuniary sanction for infringements related to insider lists by legal persons required to maintain them (extends to issuers as well as any legal person acting on their behalf or on their account);
  • EUR 500 000 as maximum administrative pecuniary sanction for infringements related to insider lists by natural persons: employee(s) and senior officer(s) responsible for this field of compliance are primarily exposed here.

Thus to sleep well after July 3, you have to be sure among others that:

  • Your insider lists are drawn up and maintained in full compliance with Article 18 of the Market Abuse Regulation (EU) 596/2014 and implementing regulations thereof;
  • You draw up and maintain deal-specific or event based sections of the insider list in compliance with Annex I Template 1 of the Commission Implementing Regulation (EU) 2016/347;
  • You draw up and maintain permanent insiders section of the insider list in compliance with Annex I Template 2 of the Commission Implementing Regulation (EU) 2016/347
  • That any person on the insider list acknowledges in writing the legal and regulatory duties entailed and is aware of the sanctions applicable to insider dealing and unlawful disclosure of inside information in compliance with Article 18 (2) of the Market Abuse Regulation (EU) 596/2014;
  • That you draw up and properly maintain a list of all persons discharging managerial responsibilities and persons closely associated with them as required by Article 19(5) of the Market Abuse Regulation (EU) 596/2014;
  • That persons discharging managerial responsibilities and persons closely associated with them are properly notified about their obligations under Article 19 of the Market Abuse Regulation (EU) 596/2014, i.e. obligation to notify the issuer and competent authority about transactions made with shares or debt instruments of that issuer or to derivatives or other financial instruments linked thereto;
  • As an issuer you ensure that transactions notified by persons discharging managerial responsibilities and persons closely associated with them are made public promptly and no later than three business days after the transaction;
  • That persons discharging managerial responsibilities within an issuer do not conduct transactions during a closed period of 30 calendar days before the announcement of an interim financial report or a year-end report as required by Article 19 (11) of the Market Abuse Regulation (EU) 596/2014;
  • You have a solution in place to simplify and support transaction notification by persons discharging managerial responsibilities, persons closely associated with them as well as for other stakeholders that are bound by notification under the personal account dealing rules, policies and procedures;
  • You have a clearance procedure to manage exceptions to the trading restriction provided under Article 19 (11) of the Market Abuse Regulation (EU) 596/2014
  • You have proper procedures and records to manage delay of inside information pursuant to Article 17 (4)-(6) of the Market Abuse Regulation (EU) 596/2014.

INSIDeR has supported EU issuers with the above compliance issues for more than 10 years.

Improved and adapted, it continues to be the best solution available to handle any of the above requirements in accordance with the new Market Abuse regime.

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