Since our last newsletter, the European Securities and Markets Authority (“ESMA”) has twice updated its Questions and Answers (“Q&A”) on Regulation (EU) 596/2014 of April 16th 2014 on market abuse (the “Market Abuse Regulation”), firstly to include two new questions and answers in Section 7 on managers’ transactions and, most recently, on December 14th 2017, to add a new section 11 on emission allowances and emission allowances market participants (“EAMPs”).
Pursuant to Article 19(11) of the Market Abuse Regulation, a person discharging managerial responsibilities (“PDMR”) within an issuer shall not conduct any transactions on its own account or for the account of a third party, directly or indirectly, relating to the shares or debt instruments of the issuer or to derivatives or other financial instruments linked to them during a closed period of 30 calendar days before the announcement of an interim financial report or a year-end report (which the issuer is obliged to make public according to the rules of the trading venue where the issuer’s shares are admitted to trading or national Law). However, pursuant to Article 19(12) of the Market Abuse Regulation, an issuer may allow a PDMR within it to trade on its own account or for the account of a third party during a closed period, as referred to above, either (i) on a case-by-case basis due to the existence of exceptional circumstances or (ii) due to the characteristics of the trading involved for transactions made under, or related to, an employee share or saving scheme, qualification or entitlement of shares, or transactions where the beneficial interest in the relevant security does not change.
In Section 7 of the Q&A, ESMA (i) has confirmed that when an issuer allows a PDMR to trade on its own account or for the account of a third party during a closed period (as referred to in Article 19(11) of the Market Abuse Regulation), the prohibition on insider dealing pursuant to Article 14 of the Market Abuse Regulation still applies and (ii) has confirmed that the transactions by a PDMR which are prohibited during a closed period under Article 19(11) of the Market Abuse Regulation, are of the same type as those which are subject to the notification requirement under Article 19(1) of the Market Abuse Regulation (noting that Article 19(1) also, however, applies to persons closely associated with a PDMR).
The new Q&A 11.1 provides some clarity on the time span for the calculation of whether the thresholds regarding CO2 equivalent emissions and the rated thermal input have been exceeded in respect of the disclosure obligation under Article 17(2) of the Market Abuse Regulation on EAMPs to publicly, effectively and in a timely manner disclose inside information concerning emission allowances which it holds in respect of its business.