MAR-compliant insider lists without the manual work

Frequently Asked Questions 

• What is inside information?

  According to Article 7 MAR, inside information shall comprise “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”. It is important to distinguish between such information that is secret and information that can be considered as price-sensitive information. Information is likely to have a significant effect on the prices if a “reasonable investor” would be likely to use it as part of the basis of their investment decisions. Unfortunately, there are no official limits or benchmarks saying that the share price must be expected to increase by X% or that the order must be of Y% of the turnover. Rather, what constitutes inside information must be evaluated on a case-by-case basis. In evaluating what may constitute inside information, the following factors may be considered: (i) the expected extent or importance of the decision, fact or circumstance compared to the company’s activities as a whole; (ii) the relevance of the information as regards the main determinants of the price of the company’s financial instruments; or (iii) all other market variables that may affect the price of the financial instruments.

• When do I open an insider list?

  According to Article 18 MAR, the company shall draw up a list, referred to in the regulation as an insider list, of all persons who have access to inside information and who are working for them under a contract of employment, or otherwise performing tasks through which they have access to inside information, such as advisers, accountants or credit rating agencies. The insider list shall be drawn up without delay when the inside information has been identified and then updated promptly when there is a change in the list, i.e. when a new insider is added. Each update shall specify the date and time when the change triggering the update occurred.

• How does delay of public disclosure work?

  The principle, as laid down in Article 17 MAR, is that the company shall disclose inside information to the public as soon as possible. According to Article 17.4 MAR, the company may delay such disclosure, provided that all of the following three conditions are met: (i) immediate disclosure is likely to prejudice the legitimate interests of the company; (ii) delay of disclosure is not likely to mislead the public; and (iii) the company is able to ensure the confidentiality of that information. When disclosure of inside information has been delayed, the company shall inform the competent authority that disclosure of the information was delayed immediately after the information is disclosed to the public.

• What are PDMRs?

  Persons discharging managerial responsibilities” (PDMR) were previously called “insiders”. This is the Board of Directors, CEO and additional persons in the management team, provided that they have regular access to inside information and power to take managerial decisions affecting future developments and business prospects. A person discharging managerial responsibilities means, therefore, a person who has a special position within the company and has nothing to do with what information one actually has access to in each particular case. According to Article 19 MAR, these persons, and the persons closely associated with them, must notify the company as well as the competent authority of their transactions in the company. The persons discharging managerial responsibilities, but not the persons closely associated with them, are also prohibited from trading 30 days before the announcement of an interim financial report or a year-end report.

• What are “permanent insiders”?

  According to article 2.2 of the Implementing Regulation, “permanent insiders” are individuals who have access at all times to all inside information within the company. These persons may be included in the company’s permanent insider list. However, please be advised that this list should only be used in a limited way and only include those persons who always (!) have access to all (!) inside information in the company and who always receive it simultaneously at the very moment when the information is identified. Our advice is to not use the permanent insider list, as it is not mandatory and causes more confusion than it helps. Include these persons in each event-based insider list instead.

• Should you keep an insider list during market soundings?

  Yes, according to MAR Article 11, organisations performing a market sounding, disclosing market participants (DMP), are obligated to maintain an insider list prior to disclosing the information. However, the DMP should not impose an obligation on the market sounding recipient (MSR) to maintain on insider list. The MSR must independently assess whether it considers the received information as inside information and establish its own insider list in accordance with MAR Article 18.