On 6 July 2017, the European Securities and Markets Authority (“ESMA”) released the sixth version of its questions and answers (the “Q&A”) on the Market Abuse Regulation (No. 596/2014) (“MAR”).
ESMA’s update to the Q&A addresses Article 3(1)(26)(d) of MAR, which states that a “closely associated person” includes “a legal person, trust or partnership, the managerial responsibilities of which are discharged” by a person discharging managerial responsibilities (“PDMRs”). ESMA clarified that the reference to “the managerial responsibilities of which are discharged” should be read to cover those cases where a PDMR of an issuer (or a closely associated natural person) takes part in or influences the decisions of another legal person, trust or partnership to carry out transactions in financial instruments of the issuer.
ESMA provides an illustrative example on this point: where a person sits on the administrative, management or supervisory body of an issuer and also on the board of another legal entity where he or she exercises executive or non-executive functions, but without taking part or influencing the decisions of that legal entity to carry out transactions in financial instruments of the issuer, such person should not be considered to be discharging managerial responsibilities within that legal entity for purposes of Article 3(1)(26)(d) of MAR. Accordingly, that legal entity should not be subject to the notification obligations under Article 19(1) of MAR unless it is directly or indirectly controlled by, is set up for the benefit of, or its economic interests are substantially equivalent to those of that person