UK MARKET ABUSE REGIME EXTENDS ITS REACH: IMPLICATIONS FOR ISSUERS
The European Union’s Market Abuse Regulation (MAR) has replaced the previous regime under the Market Abuse Directive (MAD). MAR aims to ensure market integrity and investor protection by harmonising the disclosure requirements that apply to issuers across European markets. It has been effective since 3 July 2016.
The new regime extends to issuers that trade on the London Stock Exchange’s (LSE’s) Main Market, as well as those that trade on AIM, including financial instruments for which an admission to trading on either market has been made. Listed issuers are subject to two sets of regulations within the UK – Main Market issuers will continue to comply with their obligations under the Financial Conduct Authority’s (FCA’s) Listing Rules, and AIM companies will remain subject to the AIM Rules for Companies (AIM Rules), as regulated by the LSE.
Given MAR’s wide applicability, issuers located both within and outside the European Union must consider their obligations under MAR: any financial instruments admitted to trading on an EU trading venue will be caught, regardless of the issuer’s location.
Disclosure of inside information
The definition of ‘inside information’, and an issuer’s obligation to publicly disclose it, remain largely the same as under the previous regime. Delaying disclosure continues to be possible under MAR, but the new regime brings more onerous requirements for an issuer to effect these provisions. The following conditions for delay must be met: (i) immediate disclosure is likely to prejudice the issuer’s legitimate interests; (ii) delay of disclosure is not likely to mislead the public; and; (iii) confidentiality can be ensured.
Jan-Mar 2017 Issue
Morgan Lewis