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3. Cleansing

It is important that during the market sounding process the disclosing market participant as well as the person receiving the market sounding, comply with the legal requirements. Market soundings are interactions between a seller of financial instruments and one or more potential investors, prior to the announcement of a transaction, in order to gauge the interest of potential investors in a possible transaction and its pricing, size and structuring.

MAR (No 596/2014)

Article 11

Paragraph 6
Where information that has been disclosed in the course of a market sounding ceases to be inside information according to the assessment of the disclosing market participant, the disclosing market participant shall inform the recipient accordingly, as soon as possible.

The disclosing market participant shall maintain a record of the information given in accordance with this paragraph and shall provide it to the competent authority upon request.

Paragraph 8
The disclosing market participant shall keep the records referred to in this Article for a period of at least five years.

Delegated Regulation (2016/960)

Article 1

Disclosing market participants shall ensure that the arrangements and procedures they establish to comply with paragraphs 4, 5, 6 and 8 of Article 11 of Regulation (EU) No 596/2014 are regularly reviewed and updated where necessary.

Article 2

Paragraph 1
Disclosing market participants shall establish procedures describing the manner in which market soundings are conducted.

Disclosing market participants may communicate information for the purposes of market sounding to the persons receiving the market sounding orally, in physical meetings, in audio or video telephone calls, or in writing, by mail, fax or electronic communications.

Paragraph 3
The procedures referred to in paragraphs 1 and 2 shall ensure that persons working for a disclosing market participant under contract of employment or otherwise only use equipment provided by the disclosing market participant when sending and receiving telephone calls and electronic communications for the purposes of market soundings.

Article 5

Where disclosing market participants assess as referred to in Article 11(6) of Regulation (EU) No 596/2014, that the inside information disclosed in the course of a market sounding has ceased to be inside information, they shall provide the person having received the market sounding with the following information:

  1. the identity of the disclosing market participant;
  2. an identification of the transaction subject to the market sounding;
  3. the date and time of the market sounding;
  4. the fact that the information disclosed has ceased to be inside information;
  5. the date on which the information ceased to be inside information.

Article 6

Paragraph 1
Disclosing market participants shall ensure that records of the following are kept on a durable medium that ensures their accessibility and readability over the period of retention laid down in Article 11(8) of Regulation (EU) No 596/2014:

  1. the procedures referred to in Articles 1 and 2;
  2. the standard set of information determined for each market sounding in accordance with Article 3;
  3. the data regarding persons receiving the market sounding referred to in Article 4;
  4. all communications of information which have taken place between the disclosing market participant and all persons that received the market sounding for the purposes of the market sounding, including any documents provided by the disclosing market participant to the persons receiving the market sounding;
  5. the information leading to the assessment that the information communicated during the market sounding has ceased to be inside information and the relevant notifications referred to in Article 5.

Paragraph 2
For the purposes of Article 6(1)(d), the disclosing market participant shall keep:

  1. where the communication of information has taken place by telephone on recorded lines, recordings of telephone conversations provided that the persons to whom the information is communicated have given their consent to such a recording;
  2. where the communication of information has taken place in writing, a copy of the correspondence;
  3. where the communication of information has taken place during video or audio recorded meetings, the recordings of those meetings provided that the persons to whom the information is communicated have given their consent to such a recording;
  4. where the communication of information has taken place during unrecorded meetings or telephone conversations, the written minutes or notes of those meetings or telephone conversations.

Paragraph 3
The written minutes or notes referred to in paragraph 2(d), shall be drawn up by the disclosing market participant and duly signed by both the disclosing market participant and the person receiving the market sounding and shall include:

  1. the date and time of the meeting or telephone conversation and the identity of the participants;
  2. the details of the information related to the market sounding which were exchanged between the disclosing market participant and the person receiving the market sounding in the course of the market sounding, including information provided to the person receiving the market sounding and requested from the person receiving the market sounding in accordance with the standard set of information referred to in Article 3;
  3. any document and material provided by the disclosing market participant to the person receiving the market sounding in the course of the market sounding. 

Where the disclosing market participant and the person receiving the market sounding have not agreed within 5 working days after the market sounding on the content of the written minutes or notes, the disclosing market participant shall record both a version of the written minutes or notes signed by the disclosing market participant and a version thereof signed by the person having received the market sounding.

Where the person having received the market sounding has not provided the disclosing market participant with a signed version of the written minutes or notes within 5 working days after the market sounding, the disclosing market participant shall keep a copy of the written version of the minutes or notes signed by the disclosing market participant.

Paragraph 4
The records referred to in paragraphs 1, 2 and 3 shall be made available to the competent authority upon request.

Implementation Regulation (2016/959)

Article 1

All the records referred to in Article 6 of Commission Delegated Regulation (EU) 2016/9601 shall be kept in an electronic format.

Article 4

Paragraph 1
Disclosing market participants shall inform in writing the persons that received the market soundings that the information disclosed in the course of the market sounding has ceased to be inside information.

Paragraph 2
Disclosing market participants shall record the information given in accordance with paragraph 1 in compliance with the template set out in Annex III.

 

1Commission Delegated Regulation (EU) 2016/960 of 17 May 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the appropriate arrangements, systems and procedures for disclosing market participants conducting market soundings (see page 29 of this Official Journal).

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