On 3 July 2016, the new Market Abuse Regulation (Regulation - No 596/2014 on market abuse) will take effect in Belgium and across Europe, replacing and repealing the existing Market Abuse Directive.
1 Context
The MAR will not only harmonise and enhance the current EU and Belgian regime on market abuse, but will also extend the scope of existing offences or preventive measures.
Because the MAR is a regulation with direct effect, it will become immediately applicable in Belgium on 3 July 2016 leaving the national legislator very limited discretion as to how implement it domestically.
For more details about the MAR itself, please refer to our Newsletter of 13 June 2014 (text here).
Besides, the MAR, the new set of market abuse regulations also contains the Directive No 2014/57/EU on criminal sanctions for market abuse (referred to as the “Market Abuse Directive”, “CSMAD” or “MAD 2”) which should also be implemented before 3 July 2016.
2 Recent evolutions at Belgian Level
2.1 The Belgian Draft Act implementing partially the MAR and the new Transparency Directive
On 17 May 2016, a draft act amending the law of 2 August 2002 on the supervision of the financial sector and on financial services and the law of 2 May 2007 on disclosure of major holdings in issuers whose shares are admitted to trading on a regulated market and laying down miscellaneous provisions (the “Draft Act”), has been submitted to the Belgian Parliament (text here).
The Draft Act aims at harmonizing the current law of 2 August 2002 on the supervision of the financial sector and on financial services with the MAR and replaces or repeals some of the existing Belgian legal provisions.
For instance, the Draft Act refines and clarifies the powers of the FSMA (the Financial Services and Markets Authority) which is designated as the Belgian competent authority for the purposes of the MAR. It also increases the maximum amounts of the fines which can be imposed by the FSMA in order to align them with the amounts included in the MAR.
Aside from the law of 2 August 2002 on the supervision of the financial sector and on financial services, the Draft Act is also implementing partially Directive No 2013/50/EU which amends among others Directive No 2004/109/EC (the “Transparency Directive”) by amending the law of 2 May 2007 on disclosure of major holdings in issuers whose shares are admitted to trading on a regulated market and laying down miscellaneous provisions.
2.2 New guidelines from the FSMA
The FSMA has recently published new circulars on its website in order to take into account the provisions of the MAR which will take effect as from 3 July 2016:
- the circular FSMA_2012_01 on the obligations of issuers listed on a regulated market (Dutch text | French text);
- the circular FSMA_2016_08 on practical instructions relating to the MAR (Dutch text | French text); and
- circulars similar to the circular FSMA_2012_01 but regarding the obligations of issuers listed on Alternext or on the Free Market.
The first circular has been updated to include (i) specific references to the provisions of the MAR and (ii) guidance to the issuers to make sure that they comply with the MAR and get familiar with the MAR’s main provisions.
The second circular contains guidance as to the new or amended obligations implied by the MAR regarding some key topics (insiders’ lists, market soundings, notifications to be made by persons discharging managerial responsibilities, notification of suspicious orders and transactions, notifications of a delay in the disclosure of inside information by the issuer and safe harbour provision for buy-back programs and stabilisation and investment recommendations). It also contains standard forms or templates of insider list, data of market soundings or notification of suspicious orders and transactions.
The notifications to be made by persons discharging managerial responsibilities shall, as from 3 July 2016, have to be made through an online application available on the FSMA’s website but the user guide of this application is not yet available.
The FSMA confirms that any transaction carried out by persons discharging managerial responsibilities should be notified to the FSMA and the issuer once a total amount of EUR 5,000 has been reached within a calendar year (while the FSMA was allowed by the MAR to increase this amount to EUR 20,000).
The FSMA shall continue to publish the notifications of transactions carried out by persons discharging managerial responsibilities on its website although the issuers are now authorised by the MAR to also publish on their website the notifications sent to them.
3 Recent evolutions at European Level
The ESMA (European Securities and Markets Authority) seems to be working continuously on the implementation of the MAR:
- It has published on 28 January 2016 a consultation paper relating to draft guidelines on the MAR (text here). The deadline to submit answers to the consultation paper to the ESMA was 31 March 2016 so the result of the consultation paper and the guidelines should be made public soon. This consultation paper already provides some insight as to the ESMA’s views on circumstances where the issuer would have a legitimate interest for delaying the disclosure of an inside information.
- In parallel to the implementation of the MAR, the ESMA published yesterday a first Q&A answering a specific question about the interpretation and scope of the obligations applying under the MAR to persons professionally arranging or executing transactions (text here). Further questions should be answered in the coming weeks or months.
- The various implementing regulations of the European Commission – adopted since 2014, on the basis of the ESMA’s proposal – are available on the FSMA’s website when they have been published in the Official Journal of the European Union (Dutch text | French text).
4 Next steps at Belgian and European level
At the Belgian level, further amendments to the law of 2 August 2002 on the supervision of the financial sector and on financial services (such as the amendments implementing the Market Abuse Directive) are likely to take place. However, at this stage, no draft act implementing the Market Abuse Directive has been adopted nor published.
The FSMA has indicated that its Q&A on market abuse would be removed from its website as from 3 July 2016.
The FSMA should also publish the user guide relating to its online application for notification of the transactions carried out by persons discharging managerial responsibilities. This user guide could possibly contain some further (practical) guidelines as to how the notifications should be made in the absence of relevant ESMA guidelines on some topics for the time being.
At the European level, the ESMA is expected to publish, in the coming weeks or months, several guidelines on the implementation of the MAR and to update its Q&A in relation to the MAR.
The European Commission should also keep adopting technical standards on various MAR related matters, based among others on the draft technical guidelines submitted by the ESMA on 28 September 2015 (text here).
See the links contained in the ESMA’s first Q&A relating to the MAR (text here) for the European Commission’s regulations which have not yet been published in the Official Journal of the European Union.