Below is a summary of the main developments in US and EU corporate governance and securities law and certain financial markets regulation developments since our last update on 18 October 2018.

Financial regulatory developments are available here.

In this newsletter, we provide a snapshot of the principal European, US and selected international governance and securities law developments of interest to European corporates.

EU DEVELOPMENTS

European Commission Work Programme 2019: Corporate Aspects

On 24 October 2018, the European Commission published its 2019 Work Programme. The programme covers the repeal of the remaining provisions of the Consolidated Admissions and Reporting Directive, along with further details of the Commission's intention to carry out checks of corporate reporting and evaluate corporate reporting requirements. The programme also includes information about the Commission's position on pending proposals.

The European Commission Work Programme can be accessed here.

MAR: ESMA Updated Q&A (October and November 2018)

October

On 1 October 2018, the European Securities and Markets Authority (ESMA) published its twelfth edition of its EU Market Abuse Regulation (MAR) Q&A. This edition featured the addition of three new questions and the responses (5.3, 5.4, and 5.5) clarifying the position of an issuer who is either a credit or financial institution and is considering delaying the disclosure of inside information to preserve financial stability as permitted under Article 17(5) MAR.

The new questions and responses are:

  • Question 5.3, which clarifies the factors the issuer should consider when evaluating whether the conditions listed in Article 17(5) apply and therefore enable the issuer to delay disclosure.
  • Question 5.4, which confirms that the issuer must notify the NCA of the expected duration of the delay under
  • Article 17(5). The issuer must inform the NCA if it becomes aware of an event or issue which may affect the duration of the delay.
  • Question 5.5, which confirms that an issuer will not be able to rely on Article 17(4) to delay disclosure where the NCA does not provide its consent under Article 17(5) to delay disclosure of inside information.

November

On 12 November 2018, ESMA published the thirteenth edition of its MAR Q&A.

The main highlight was the introduction of question 7.10, which discusses whether the restriction in Article 19(11) MAR, preventing PDMRs from trading in a closed period, applies to transactions of the issuer relating to

its own financial instruments where it is the PDMR who makes the decision or implements a previous decision with respect to the issuer's "own dealing."

In its answer, ESMA explains that the restriction in Article 19(11) MAR does not prohibit the above issuer

transactions as the PDMRs are implementing the transaction in their capacity as directors or employees for the issuer. The transactions are not for the benefit of a third party as Article 19(11) specifies but technically actions of the issuer itself. Article 19(11) MAR does not prohibit the issuer itself from conducting these transactions but the PDMRs within the issuer. It should be noted that the PDMR implementing a decision on behalf of the issuer remains subject to the restrictions of insider dealing and must therefore proceed with caution.

The MAR Q&As can be accessed here.

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