Changes to UK market abuse regime including longer to announce PDMR transactions
The Financial Services Act 2021 has become law and includes changes to the UK market abuse regime. Changes relating to notification of manager transactions and responsibility for insider lists are being made to keep the UK version of the Market Abuse Regulation aligned with the EU version (which was amended on 1 January 2021). Changes to penalties for criminal market abuse bring the maximum prison sentence in line with that for other economic crimes such as money laundering and bribery offences.
Listed companies get longer to announce PDMR transactions
Under UK MAR, there is currently a three business day window during which persons discharging managerial responsibilities and their closely associated persons must notify their dealings to the Financial Conduct Authority and to the issuer. The issuer must then announce details of the transaction to the market before the end of that same three business day window.
This will change from 29 June 2021: instead there will be a separate period for the PDMR or CAP to notify the issuer and the FCA (three working days from the transaction). The issuer will then have two working days from receipt of such notification in which to announce to the market. “Working days” replaces “business days” but in practice still means any week day that is not a public holiday in England and Wales.
Issuers should consider whether they wish to build this extra flexibility into their own internal share dealing codes. For companies that in practice notify the FCA on behalf of their PDMRs they would still need to meet the three working day deadline from the date of trade (the extra two working days only applies to the market announcement).
Clarification that advisers and others have direct responsibility for maintaining insider lists
The rules in MAR on insider lists are also being amended from 29 June 2021, to clarify that a person acting on behalf of an issuer is themselves required to maintain an insider list (rather than it being an obligation only on the issuer).
Longer prison sentences for criminal market abuse
From a future date to be confirmed, the maximum prison sentence for criminal insider dealing and criminal market manipulation will change from seven years to ten years. This shows the UK’s commitment to clamping down on these offences and should act as an increased deterrent to such behaviours.
Click here for the Financial Services Act 2021 (see sections 30 and 31 for the relevant provisions).
