At the end of April the AFM sent out a short questionnaire concerning some specific qualifications set out in the European Regulation no. 596/2014 on market abuse (hereinafter: MAR) by issuers listed on Euronext Amsterdam. Please view the link for the accompanying message. 95% of the addressed issuers answered the questionnaire. Hereby, the AFM provides general feedback concerning the responses received and draws attention to a number of related topics. We recommend applying these suggestions.
Qualification of information as inside information
It remains of great importance that during the process of qualifying information as inside information all correct elements are included by the issuer.
A majority of the addressed issuers indicate that the way in which inside information is assessed has not changed since MAR applied from 3 July 2016. Some issuers do indicate that they intensified the process concerning the identification, classification and qualification of inside information.
It turns out that consultations/discussions that take place between individuals from different disciplines about the correct qualification of information work effectively. Half of the addressed issuers state that they come to the final qualification together with a legal advisor.
Notification of delay
Recently, the AFM has noticed that a number of issuers have not indicated their delay of publication of inside information in the form with which they submit their press release to the AFM. The AFM requests parties to fill in the form correctly. The issuer itself remains responsible to publish inside information as soon as possible and correctly, as well as for the notification of the delay, even if the issuer uses a third party.
Use of website
In addition to the survey, the AFM examined the websites of all participating issuers concerning accessibility and completeness of the website with regard to disclosure of inside information (press releases). This survey reveals that, in order to comply with the requirements of Implementing Regulation (EU) 2016/1055, a large number of issuers still has to ensure:
- an easily identifiable section of the website for inside information; and
- the clear indication of not only the date, but also the time of the disclosure.
Examples of criteria for determining inside information
From the answers to the questionnaire the AFM derives – based upon best practices from issuers – examples that may help to determine if there is inside information:
- To determine if there is any inside information directly related to the issuer, it may be useful to look at the degree of deviation from previous external communications (including strategy and outlook) and other publicly-known information (such as consensus estimates).
- To determine whether information may have a significant effect on the price, it may be relevant to determine whether and, if so, how the market has reacted in the past to similar information from your company and / or competitors.
- Information related to, for example, a supplier or customer may also fall within the scope of inside information, for example, if the result of that information relates directly to the issuer and the information would likely have a significant impact on the prospects (and thereby on the price).
The definition of ‘person discharging managerial responsibilities’ (or PDMR)
Positions and responsibilities can change in the course of time. The AFM therefore advises to periodically assess whether the persons in certain functions or responsibilities within your organisation fall within the definition of PDMR within the meaning of the MAR. This includes not only executive functions but, for example, executive positions (head / manager) within the Legal, Finance and Human Resources departments, meeting the following criteria:
The issuer is required to notify the PDMRs within their organisation of their obligations under Article 19 MAR in writing. In addition, the issuer must draw up a list of PDMRs and persons closely associated with them.
The PDMR has to take into account that, with the arrival of MAR, transactions that have been carried out under a discretionary management agreement must also be reported. The exemption that existed in the Netherlands until 3 July 2016 is no longer recognised. The fact that it concerns a transaction undertaken by another person on their own discretion on behalf of the PDMR can be indicated at number 4b of the notification form concerning the nature of the transaction.
Overlap notifying obligation for executive and supervisory directors
In case of a notifying obligation for transactions pursuant to Article 5:48 of the Financial Supervision Act (FSA) (notifying obligation for executive and supervisory directors) as well as pursuant to Article 19 MAR, then a notification ex Article 5:48 FSA will suffice. In this way, the obligation under Article 19 of the MAR will also be met.
The AFM would like to direct your attention to the most recent version of the MAR Q&A of ESMA published on 6 July 2017. In addition, the AFM would like to direct your attention to the Decree Implementing the market abuse regulation (in Dutch), published on 11 July 2017 and entered into force the following day.
For questions and contact about press releases, please send an e-mail to email@example.com or contact AFM Monitoring at phone number: +3120 797 3777.
For questions and consultation about PDMR notifications, please send an e-mail to firstname.lastname@example.org.