The Market Abuse Regulation in Belgium

Transcription

1 April 2016 The Market Abuse Regulation in Belgium Will you be ready? The new Market Abuse Regulation ( MAR ) will apply as from 3 July It will replace the existing Market Abuse Directive and the current market abuse regime in Belgium. Hence, listed companies should finalise their assessment of the impact of MAR on their businesses and ensure that their systems and processes are revised where necessary to comply with the new regime. What will happen? MAR will introduce a new regime for market abuse (comprising insider dealing, the unlawful disclosure of inside information and market manipulation). The rules on market abuse will continue to apply to companies whose financial instruments are admitted to trading on a regulated market and will now also apply systematically throughout the EU to companies whose financial instruments are traded on an MTF (multilateral trading facility) or an OTF (organised trading facility). MAR also captures other products whose price or value depends on or has an effect on the price or value of a financial instrument traded on a trading venue, including credit default swaps and contracts for difference. The Financial Services and Markets Authority ( FSMA ) will remain responsible for enforcing the rules in Belgium. Which rules exist? MAR will have direct effect as from 3 July 2016, meaning it will apply automatically in all EU Member States as from that date. MAR is supplemented by further detailed technical rules contained in Commission implementing and delegated acts, such as on the precise format of insider lists, the functioning of closed periods, the types of and format for notifiable managers transactions and the conditions applicable to buy-back programmes. The European Securities and Markets Authority ( ESMA ) will also produce guidelines on other aspects of MAR. A new Directive on Criminal Sanctions for Market Abuse ( CSMAD ) complements MAR by establishing minimum rules on criminal offences and wider and tougher criminal sanctions for at least the most serious cases of market abuse. In Belgium, the required amendments to national legislation resulting from MAR and the acts transposing CSMAD are still to be adopted. In addition, the FSMA is expected to publish further guidance in the coming weeks. The Market Abuse Regulation in Belgium 1

2 What does this mean for Belgian listed companies? Belgian listed companies are well used to complying with the rules on market abuse. As regards its main principles, the new regime is broadly comparable to the existing one in Belgium, but there are a number of differences which will affect the procedures, processes and systems of listed companies. It is a significant project to implement all the required changes and, if not done already, listed companies should act now to ensure that they are ready by July Upcoming seminar Linklaters Belgium wishes to invite you to a seminar, to be held on Thursday 16 June 2016 over lunch, during which Françoise Lefèvre (Partner) and Thierry L Homme (Counsel) from the Brussels office and Daniel Csefalvay (Partner) from the London office will address the latest developments regarding the new market abuse regime. We will send you a detailed invitation in the coming days. The matters that a typical Belgian listed company should consider are set out in the table on the next page. Our one stop shop for Linklaters guides and views on MAR is available on the Linklaters Knowledge Portal. Authors: > Thierry L Homme, Counsel ( ) > Ilse Brouwers, Counsel ( ) > Tim Vandorpe, Managing Associate ( ) This publication is intended merely to highlight issues and not to be comprehensive, nor to provide legal advice. Should you have any questions on issues reported here or on other areas of law, please contact one of your regular contacts, or contact the editors. Linklaters LLP. All Rights reserved 2016 Linklaters LLP is a limited liability partnership registered in England and Wales with registered number OC It is a law firm authorised and regulated by the Solicitors Regulation Authority. The term partner in relation to Linklaters LLP is used to refer to a member of the LLP or an independent consultant or, outside of Belgium, an employee of Linklaters LLP or any of its affiliated firms or entities with equivalent standing and qualifications. A list of the names of the members of Linklaters LLP and of the non-members who are designated as partners and their professional qualifications is open to inspection at its registered office, One Silk Street, London EC2Y 8HQ, England, or on Please refer to for important information on Linklaters LLP s regulatory position. We currently hold your contact details, which we use to send you newsletters such as this and for other marketing and business communications. We use your contact details for our own internal purposes only. This information is available to our offices worldwide and to those of our associated firms. If any of your details are incorrect or have recently changed, or if you no longer wish to receive this newsletter or other marketing communications, please let us know by ing us at marketing.database@linklaters.com. The Market Abuse Regulation in Belgium 2

3 Dealing codes, PDMR dealings and sharebased incentive plans MAR will have an impact on dealing codes. On the whole, the new rules will be stricter, with more dealings covered and narrower exceptions. For example, MAR provides for a mandatory 30 calendar days closed period before the announcement of interim or year-end results during which persons discharging managerial responsibilities ( PDMRs ) are restricted from dealing (except in certain exceptional circumstances and after obtaining clearance from the issuer). MAR also contains revised rules on disclosure of PDMR dealings. Subject to a de minimis threshold of EUR 5,000, PDMRs and persons closely associated with them have to notify the issuer and the FSMA promptly and no later than three (currently: five) business days after the date of every transaction conducted on their own account relating to the securities (including debt instruments) of the issuer. The market must be notified by the same deadline. The issuer must also draw up a list of all PDMRs and persons closely associated with them and must notify PDMRs of their obligations in writing. The new rules will also impact share-based incentive plans since, other than in the current regime in Belgium, not only the exercise but also the mere acceptance of stock options is covered by the rules on the disclosure of PDMR dealings. Draw up an action plan for how the new regime for PDMR dealings and notifications under MAR will be reflected in your organisation Identify required changes to dealing codes, processes and record-keeping Identify the impact of the new rules on any envisaged grants under share-based incentive plans Set up comprehensive training for PDMRs The Market Abuse Regulation in Belgium 3

4 Inside information The definition of inside information under MAR is broadly the same as the current definition and the obligations relating to inside information are also similar: an obligation to disclose inside information to the market and a prohibition of insider dealing (except in case of legitimate behaviour) and unlawful disclosure of inside information. It should be noted that MAR now explicitly states that an intermediate step in a protracted process shall be deemed to be inside information if, by itself, it satisfies the criteria of inside information. MAR provides for the possibility for an issuer to delay disclosure of inside information under the conditions which are well known under the current regime. However, different from such regime, an issuer will now only need to inform the FSMA that disclosure of information was delayed after the information is disclosed to the public. Companies will need to be clear on how and when inside information first arose and be able to identify who made the decision to delay disclosure. They also need to be prepared to explain how the conditions for delaying disclosure to the market were satisfied. Detailed rules on the disclosure of inside information and the (conditions for the) delay thereof are set out in the technical standards developed by ESMA. Consider which internal policies and procedures need to be updated to comply with the new regime (e.g. on record-keeping) Any staff who may encounter inside information in the course of their work will need to be advised of the new rules and any changes in processes Review how inside information is currently displayed on the company s website and consider if it complies with the new requirements to be contained in an easily identifiable section The Market Abuse Regulation in Belgium 4

5 Insider lists Market soundings Although the requirement to maintain an insider list will be broadly the same as it is now, the format and content of insider lists will change and will be prescribed by technical standards. In particular, more extensive data will need to be recorded for each individual added to an insider list and the list is to be divided into separate sections relating to different inside information. There will also be a requirement for the issuer to send a written note to any person who is added to an insider list and to take all reasonable steps to ensure that any person on an insider list acknowledges in writing the duties entailed and is aware of the applicable sanctions. MAR is introducing a new regime for the disclosure of inside information as part of market soundings, which comprise the communication of information to potential investors, prior to the announcement of a transaction, in order to gauge their interest in a possible transaction and the conditions relating to it. Currently, this is not specifically regulated in Belgium. The market soundings regime is not intended to inhibit relations between an issuer (including through financial institutions) and its investors but to provide a clear framework within which disclosure can be made legitimately without fear of allegations of improper disclosure. The disclosing market participant must consider whether the market sounding will involve the disclosure of inside information and must draw up a written report of its conclusion. Consider how your company will implement the changes to insider lists Will your software templates, internal systems or policies need to be updated Ensure that all insiders acknowledge their duties and appropriate record-keeping is put in place Consider the steps that will be needed to implement the detailed procedures and record-keeping requirements The above includes, for example, limiting the number of employees who conduct market soundings and ensuring they are trained properly The Market Abuse Regulation in Belgium 5

6 Share buy-backs Training Furthermore, the disclosing market participant must comply with strict information duties towards the receiving party of the market sounding (and must maintain a record of all information provided). Detailed rules on market soundings are set out in the technical standards. Share buy-backs are not market abuse if they are announced and are conducted within certain parameters. There will continue to be a safe harbour for share buy-backs under MAR, but there will be slight differences. For example, the new rules will clarify how the volume limit should be calculated when shares are traded on more than one venue. Technical standards will set out the conditions that buy-backs have to meet to qualify for the safe harbour. Relevant staff will need to be trained on the new rules and the implication for their roles. Linklaters can work with you in designing and delivering a training programme. If your company is currently engaged in or considering a share buy-back programme that is likely to extend beyond 3 July 2016 and relies on the market abuse safe harbour, it will need to be assessed in light of the revised safe harbour to ensure it will still comply Consider who in your organisation will need to be trained Plan and deliver training sessions Consider manuals and online learning modules for refresher training and induction purposes The Market Abuse Regulation in Belgium 6