MAR - Common sense prevails on closed periods

The FCA has released a statement about the approach to closed periods and preliminary results under the Market Abuse Regulation. The key points to note are:

  • where an issuer is announcing preliminary results, the FCA's view is that the closed period should fall before those results are announced. A second closed period before the announcement of the year-end report will not be required;
  • this view only applies where the preliminary announcement contains all inside information expected to be included in the year-end report; and
  • this issue is still being discussed at the European level and the FCA's view is subject to any further clarification that comes from the European Commission or ESMA.

There has been uncertainty around this point as MAR sets out that closed periods (during which persons discharging managerial responsibilities are prohibited from dealing in issuer securities) should fall only before yearly and half yearly financial results that issuers are obliged to make public. As preliminary announcements are optional, on a strict reading of MAR, there would be no official closed period before preliminary results are announced. Instead, the closed period would fall before the announcement of the final year-end report. Closed periods under MAR last for 30 days.

This approach potentially led to the situation where PDMRs would not be able to deal ahead of both the preliminary results (due to the possession of inside information) and the final report (due to the official closed period). As issuers were preparing themselves for, in effect, this double closed period, the FCA's statement is a very welcome development.