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MAR is an EU Regulation which has direct effect across all EEA member states.  MAR disclosure obligations apply to financial instruments admitted to all multilateral trading facilities, as well as regulated markets.  Accordingly, these obligations apply to AIM companies admitted to trading on AIM.

The key disclosure obligations in MAR relate to the disclosure of inside information and disclosure of deals by persons discharging managerial responsibilities and closely associated persons.  MAR also introduced mandatory close period rules.

The disclosure obligations under MAR are within the remit of Financial Conduct Authority (“FCA”) as the competent authority in the UK and we have been working closely with the FCA to co-ordinate our approach to the implementation of MAR for AIM companies.

The AIM Rules already sit alongside wider regulatory and legal obligations owed by an AIM company as described in more detail in AIM's Regulatory Landscape.

We have compiled frequently asked questions for AIM companies and their nominated advisers with regard to the disclosure obligations contained within MAR and the AIM Rules.

Date: 2 August 2016

1.    What is MAR and why has it been introduced?

MAR is an EU regulation which came into force on 3 July 2016.  The objective of MAR is to ensure market integrity and investor protection.  The regulation will harmonise disclosure requirements applying to issuers across European markets (regulated and multilateral trading facilities).

2.    Where can I find more information about MAR?

FCA website link; ESMA website link; and  European Commission website link

3.    Does MAR apply to issuers on AIM?

Yes.  MAR includes disclosure obligations and closed period rules that apply to issuers that have agreed to or have been approved for admission to trading on a multilateral trading facility (MTF).  AIM is an MTF and MAR therefore applies. 

4.    What other obligations are there for an AIM company under MAR beyond disclosure and closed period rules?

An AIM company should review MAR so that it understands how MAR applies to it.   AIM companies should note the new requirement to draw-up and maintain a list of all those persons working for them that have access to inside information. 

5.    Who is responsible for enforcing MAR?

In the UK, the FCA is the competent authority. Its powers as competent authority are contained in Article 23.

6.    Does this mean I will have to deal with two regulators?

Although the purpose underlying MAR and the AIM Rules differ, there will be overlap as is already the case in respect of other aspects of the AIM Rules where they overlap with the obligations a company has under the Financial Services and Markets Act 2000. The FCA recognises the role London Stock Exchange plays as the market operator of AIM and accordingly, in the first instance, AIM Regulation will consider an issuer’s disclosure obligations under the AIM Rules as part of its real time work and will raise questions with the Company’s nominated adviser where appropriate.   AIM Regulation works closely with the FCA as competent authority, in sharing any information with the FCA which might be relevant to its consideration of MAR.  However, AIM Regulation is not able to opine on compliance with MAR.  Further, the FCA will consider and contact the issuer directly should it have questions regarding compliance with MAR.

7.    If I have a question on MAR who should I contact?

The FCA has a dedicated website in respect of MAR and issuers should consider the guidance on Article 17 and 19 in chapters 2 and 3 of the Disclosure Guidance and Transparency Rules (“DTRs”).   If you require clarification on a specific set of circumstances further to the information provided on FCA’s website your queries on MAR should be addressed to the relevant competent authority and you should  obtain legal advice.  FCA is the competent authority on MAR in the UK. 

An AIM company must continue to seek guidance and advice from its nominated adviser in respect of compliance with the AIM Rules. 

8.    If an AIM company is complying with MAR does this mean it is complying with the AIM Rules?

Compliance with MAR does not automatically mean an AIM company will have satisfied its obligations under the AIM Rules. 

In this regard it will not be a defence to a breach of the AIM Rules that an AIM company had received legal advice that it was MAR compliant.

9.    If an AIM company complies with the AIM Rules does this mean it is complying with MAR?

Compliance with the AIM Rules does not automatically mean an AIM company will have satisfied its obligations under MAR.  An AIM company must comply with the AIM Rules and MAR at all times.

The powers of a competent authority for a breach of MAR are contained at Article 23 of MAR. 

10.  If an AIM company is able to delay inside information under MAR is it also able to delay information under AIM Rule 11?

The ability to delay the publication of inside information under MAR does not override the disclosure obligation contained in the AIM Rules.  Whilst the circumstances may also allow delay of disclosure under the AIM Rules an AIM company must consider whether it is able to delay such information with the guidance of its nominated adviser taking into account the guidance to AIM Rule 11. 

On 13 July 2016 ESMA published final guidelines under MAR relating to delayed disclosure of inside information.

11.  Where does an AIM company make notifications of delayed disclosure of inside information under Article 17(4)?

The notification must be made to the AIM company’s competent authority. The notification will be through an online form.

12.  Why are there two sets of rules dealing with disclosure?

The AIM Rules already overlap in certain areas with FSMA 2000 (eg misleading statements,) as well as the DTRs (in respect of disclosure of significant shareholdings).

The AIM Rules are market operator rules and AIM Rule 11 has been retained by the Exchange to ensure the maintenance of a fair and orderly market in securities through prompt and fair disclosure of price sensitive information.

Whilst there is clearly an overlap in respect of both sets of obligations, they should be considered separately.  The AIM Rules are principles based, and accordingly the consideration of AIM Rule 11 disclosure obligations, should be undertaken in conjunction with the advice and guidance of a company’s nominated adviser and should not be overly narrow or technical.  We consider this approach is fundamental to ensuring the integrity of the market. 

An AIM company should ensure that it seeks AIM Rules disclosure advice from its nominated adviser as is required pursuant to AIM Rule 31.  Seeking legal advice in respect of MAR compliance will not be a defence to failing to seek AIM Rules advice from the nomad.

13.   What is a PDMR?

This is defined at article 3(25) of MAR as a ‘person discharging managerial responsibilities’ within an issuer who is:

(a)  A member of the administrative, management or supervisory body of that entity; or

(b)  A senior executive who is not a member of the bodies referred to in point (a) who has regular access to inside information relating directly or indirectly to that entity and power to take managerial decisions affecting the future developments and business prospects of that entity

14.   How does a PDMR make notifications to the CA?

PDMRs as well as persons closely associated to them are required, under MAR Article 19, to notify the issuer and the FCA of certain transactions in or related to the issuer’s financial instruments conducted on their own account and worth over EUR 5,000. Such notification shall be made promptly and no later than three business days.  Please see link to FCA’s PDMR notification form.

15.  What is the difference between inside information under MAR and price sensitive information under AIM Rules?

Article 7 of MAR defines the type of information that comprise inside information.

Rule 11 of the AIM Rules contains the provisions regarding the general disclosure of price sensitive information.  Because the AIM Rules are principles based, they do not contain a specific definition of price sensitive information.  Instead Rule 11 includes disclosure tests and principles. An AIM company must also consider, with the advice and guidance of its nomad, whether a notification is required taking into account the purpose of the rule and in this regard, an overly technical and narrow approach to the rule should be avoided. 

16.  How will close periods work for director dealings with MAR?

The AIM Rules will no longer include reference to close periods as Article 19(11) will establish a new definition of “closed” period and prohibit dealings by PDMRs during this period.  Therefore it is not possible to retain the existing AIM Rule 21.

As noted above, the prohibition of dealing during a close period by PDMRs is contained in Article 19(11) which will apply to AIM companies and PDMRs from 3 July.  Article 19(12) provides circumstances when an issuer may allow a PDMR to trade on its own account.  The Commission has also published delegated regulation specifying the circumstances under which trading during a closed period may be permitted by the issuer, as referred to in Article 19(12).

The FCA is the competent authority in the UK in respect of compliance with the PDMR dealing rules under MAR.

17.  the FCA has confirmed that there is no requirement for a ‘model code’ for premium listed companies so why does AIM have a ‘higher standard’?

The AIM Rules are designed to address matters that are appropriate for companies admitted to AIM.  Given the differences in nature, size and stage of development of AIM companies as compared to Main Market companies, the AIM rules may differ from the Listing Rules in certain respects.  

The AIM Rules currently require AIM companies to have appropriate systems and controls in place to enable them to meet their AIM Rules obligations and accordingly all AIM companies should already have in place closed period controls.  Regardless of the fact that the closed period rules will now be contained in MAR, these controls remain important for investor confidence.

Given the above, we do not consider that the provisions of new AIM Rule 21 are disproportionate as they reflect what is considered to be a sensible approach for AIM companies.

18. What does the Exchange consider a reasonable and effective dealing policy?

The Exchange is not prescribing the contents of the policy beyond some high-level minimum requirements.  Accordingly, the company and its nomad should consider what is meaningful in the context of the particular company to ensure effective controls.   We would assume that this is the same approach that AIM companies and their nomads adopt in respect of other regulatory systems and controls.    

19.  Is an issuer able to end its closed period on publication of preliminary results?

FCA, the competent authority in the UK, has issued a statement in respect of closed periods and preliminary results under MAR, which was similar to what ESMA has now confirmed in its 'Questions and Answers'.  FCA’s statement can be viewed at this link.

20.  Where can I find the implementing technical standards with regard to the precise format of insider lists?

See link to the Official Journal of the EU: Commission Implementing Regulation 2016/347

21.  where can I find the implementing technical standards with regard to the public disclosure of inside information?

See link to the Official Journal of the EU: Commission Implementing Regulation 2016/1055


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