Try for free

Questions & Answers

Which companies are covered by MAR?

MAR mainly covers the following companies:

  • companies traded on a regulated market (stock exchange)
  • companies traded on a multilateral trading facility (MTF)
  • issuers of bonds traded on stock exchange or MTF
  • Issuers of products (only discretionary traded; bonds, structured finance products, emission allowances or derivatives) traded on a organized trading facility (OTF)

What is "inside information"?

Insider information is "information of a precise nature, which has not been made public, relating, directly or indirectly, to one or more issuers or to one or more financial instruments, and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments” (MAR Art. 7).

Information is likely to have significant price impact if a "reasonable investor" would use it as part of its investment decision. In assessing what may constitute inside information, the following factors may be considered:

  • the expected extent or significance of the decision or event in relation to the entire issuer's business;
  • the importance of the new information in relation to the factors determining the pricing of the financial instruments; or
  • other factors that could affect the price of financial instruments.

Information regarding an event is already classified as an event when the event has actual prospects of being realized. The following may include inside information:

  • Acquisitions or divestures
  • Initiation of, termination or decision taken in connection with disputes
  • Authority decisions
  • Research results, events related to product development or inventions
  • Significant deviations in relation to expected financial development ("profit warning")
  • Financial information stating that the issuer has financial difficulties
  • Information related to subsidiary or associated companies
  • Shareholder agreements that the issuer is aware of and which may affect the transferability of the issuer's financial instruments
  • Credit or customer losses
  • Information about joint ventures
  • Price or currency fluctuations

When can "postponed disclosure" occur?

The main rule is that inside information should be published as soon as possible (MAR Art. 17).
However, publication may be postponed if all of the following conditions are met (MAR Art. 17.4):

  • immediate disclosure is likely to damage the legitimate interests of the Company;
  • it is unlikely that deferred disclosure misleads the public; and
  • the company can ensure that the information remains confidential.
    • Immediately after the company has published such information, the financial supervisory authority shall be informed that the publication has been postponed.

Who is a "person discharging managerial responsibilities" (PDMR)?

PDMRs: (a) board members (incl. deputies), (b) MDs (incl. vice MDs) and (c) any possible other senior executive, who has regular access to inside information with power to take managerial decisions affecting the future developments and business prospects of the company.

Decisive is the position of the person in the company (i.e. regardless of the information the person actually has in the individual case).

PDMRs - and their closely associated persons (PCAs) - shall, within three business days, report their transactions in the company to both financial supervisory authority and the company (MAR Art. 19). PDMRs (not PCAs) also have a trade ban 30 days before the reporting date.

How is the list of PDMRs and PCAs kept?

The issuer must keep a list of all PDMRs and PCAs (i.e. regardless of the logbook). There is no requirement for special format for the list. The list must state: (a) name (and appropriate position) of PDMRs and (b) names and business names regarding their PCAs in a way that makes it possible to derive who is associated to who. It is not the responsibility of the issuer to check who is associated or if such person has been notified. Nor does the issuer have to do anything with the transaction notifications received by the issuer. The list is not public.

Who is a "permanent insider"?

Permanent insider is a person who continuous has access to all inside information (Art. 2.2 Implementing Regulation). Few people meet these requirements and it is voluntary to keep a permanent logbook (as opposed to the mandatory event-based logbook).

How is the logbook kept?

The company shall establish an insider list ("logbook") of all persons who: (a) have access to inside information, and work for the company through employment contracts, or (b) otherwise perform information through which they have access to inside information such as advisers, auditors or credit rating agencies (MAR Art. 18).

The logbook should be electronic - and the content requirements are very detailed. The establishment shall be made without delay when the inside information has been identified and then at each change (e.g. when new persons are added). Each update should specify the date and time of the change that caused the update.

An issuer (or person acting on behalf of the issuer) shall update the logbook without delay:

  • When the reason for a person appearing on the insider list is changed.
  • When a new person has inside information (and therefore needs to be added).
  • When a person no longer has access to inside information.

At the request of the financial supervisory authority, the logbook must be handed in as soon as possible.

If another person acting on behalf of the issuer, or for the account of the issuer, assumes the task of preparing and updating the logbook, the issuer remains fully liable for that the rules for managing logbook are followed.

Each section of the logbook should have a title indicating the name of the business-specific or event-based inside information.

The field "Company name and company address" usually indicates the company in which the person in question is employed and the address of the place where the person is working.

The field "Function and reason for access to inside information" indicates the capacity (e.g. legal adviser) the person has access to the information (i.e., no specific inside information a person has).

The issuer shall take all reasonable steps to ensure that all persons listed in the logbook confirm in writing that they are aware of the legal obligations involved and the sanctions applicable to insider dealing and unauthorized disclosure. If a person who has previously been admitted to a particular issuer's logbook, and thus submitted such written confirmation, is included in a new section, no new confirmation is required, but it is sufficient for the issuer to send a notification to the person in question. (If the last confirmation was issued on the basis of a notification that only stated the sanctions applicable before 1 February 2017, a new confirmation should be obtained.)

When updating the logbook, it is not necessary to store the previous wording in particular (according to the financial supervisory authority confidential communication). It is then enough to keep new people in the logbook on a regular basis and record in the prescribed manner when the logbook was last updated with the date and time (i.e. using UTC time code), concerning when individuals were given, or ceased to have, inside information. However, the logbook will ensure "access to and recovery of earlier versions" of the logbook (see Implementing Regulation). This means, among other things, that out-of-date sections must be preserved in a manner that corresponds to the requirements for access to current sections. It also means that if a logbook is transferred in a new format or similar, the previous version must be retained. As long as the issuer is merely entering new information in the logbook on a regular basis and in the prescribed manner, only one version of the logbook is found (no "previous versions"), where it is also duly identified how persons were added as more individuals received inside information.

Read our 7 step checklist for MAR compliance.