Notifications and Public Disclosure of Transactions: Obligations for Persons Discharging Managerial Responsibilities
The European Union (EU) and the United Kingdom (UK) have established stringent regulations to prevent market abuse and ensure a level playing field for all investors. Among these regulations are the EU Market Abuse Regulation (MAR) and the UK Market Abuse Regulation (UKMAR), which impose specific disclosure requirements on individuals with managerial responsibilities in listed companies.
Overview of MAR and UKMAR
Both MAR and UKMAR aim to create a transparent and fair market by preventing insider trading and other forms of market manipulation. The regulations require that all inside information be disclosed as soon as possible to the public.
Persons Discharging Managerial Responsibilities (PDMRs)
PDMRs are defined as the directors, senior managers, and their closely associated persons of listed companies. These individuals are subject to specific disclosure requirements under MAR and UKMAR.
Notification of Transactions
PDMRs must notify the National Storage Mechanism (NSM) and the company’s regulatory authority when they or their closely associated persons conduct transactions in the issuer’s shares or debt instruments. The notification must be made within three business days of the transaction.
- The notification should include the following information:
- Name and contact details of the PDMR and the closely associated person;
- Description of the transaction (type, volume, price, and date);
- Reason for the transaction;
- Position held by the PDMR;
Public Disclosure
Once the NSM and regulatory authority have confirmed the receipt of the notification, the company must make the information public. This can be done through the company’s website or through a Regulatory Information Service (RIS).
Effect on Individuals
The disclosure requirements imposed on PDMRs under MAR and UKMAR serve to promote transparency and prevent insider trading. By requiring prompt disclosure of transactions, the regulations help to ensure that all investors have access to the same information at the same time.
Effect on the World
The implementation of MAR and UKMAR has had a significant impact on global financial markets. By creating a more transparent and fair market, these regulations have helped to restore investor confidence and reduce the risk of market manipulation. Furthermore, the regulations have facilitated cross-border cooperation between regulatory authorities and strengthened the fight against insider trading.
Conclusion
The disclosure requirements imposed on Persons Discharging Managerial Responsibilities under the EU Market Abuse Regulation and the UK Market Abuse Regulation serve to promote transparency, prevent insider trading, and create a level playing field for all investors. By requiring prompt disclosure of transactions, these regulations help to ensure that all investors have access to the same information at the same time. The impact of these regulations has been felt both at the individual and global levels, with increased transparency, investor confidence, and reduced risk of market manipulation.
It is important for PDMRs to be aware of their obligations under MAR and UKMAR and to ensure that they comply with the disclosure requirements. Failure to do so can result in significant legal and reputational consequences.
