The Brexit transition period ends at 11pm on 31 December 2020, and, at this point, the UK will begin to decouple from the EU financial services regime – and companies listed in London that have operated under the UK Market Abuse Regulation (UK MAR) during the transition period will need to respond to changes.
UK MAR is essentially a transposed version of the EU Market Abuse Regulation (596/2014). In addition to setting out market abuse offences, the regulation has become familiar to issuers as the rulebook prescribing a number of ongoing compliance obligations including, amongst others, disclosure of share dealing and the maintenance of insider lists.
Draft legislation put before Parliament in the Financial Services Bill on 21 October 2020 introduces changes to UK MAR, and marks the first divergence from the existing EU rulebook for UK issuers.
The changes to UK MAR will take effect two months after the Bill becomes law (for obvious reasons, expected to be by 31 December 2020 at the latest), so issuers have a reasonable period of time to prepare. So what are the first post-transition changes for UK MAR?
The UK MAR changes reframe the market notification period for issuers. Under the amended UK MAR, persons discharging managerial responsibilities (PDMRs) will need to notify dealings in the issuer's securities to the issuer/Financial Conduct Authority within three "working days" of the transaction taking place (as opposed to three "business days" currently). This does not materially alter the PDMR obligation, but the definition of "working day" captures specific UK holidays including Christmas Day, Good Friday and other designated bank holidays.
More significantly – and in a welcome change to the existing regime – issuers now have two working days from receipt of the notification from the PDMR to make their back-to-back notification to the market of the dealing. Currently, both PDMRs and issuers are required to make their respective notifications within the same three-day window following the dealing, meaning that issuers will no longer have to scrabble to make a timely notification to the market if faced with a late notification from a PDMR.