On August 17, the City of London Law Society and Law Society Company Law Committees’ Joint Working Parties on Market Abuse, Share Plans and Takeovers Code (Joint Working Parties) published a Questions and Answers paper (Q&A) on the EU Market Abuse Regulation (MAR). The Q&A published sets out the Joint Working Parties’ suggested approach to implementing particular matters of MAR and follows an initial Q&A document published by the Joint Working Parties on July 5, 2016 (July Q&A).
MAR went into effect on July 3 and introduces new requirements previously not covered in the Market Abuse Directive in relation to market soundings and persons discharging managerial responsibilities (PDMR) within an issuer, among others. Under MAR, disclosing inside information in the course of a market sounding is deemed to be part of the normal exercise of a person’s employment, profession or duties, so long as they comply with the MAR provisions on market soundings. MAR also introduces notification and closed-period requirements for PDMR’s within an issuer when dealing on their own account in relation to the issuer.
The latest Q&A covers the scope of the market soundings regime (including when negotiations and communications between bidders and targets, and/or bidders and shareholders, in relation to irrevocable undertakings to accept the offer/vote in the scheme fall within the market sounding regime), stake-building on a takeover, and PDMR dealings (including in relation to what dealings a PDMR can accept or enter into during or outside a closed period), among others.