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MAR 1.4 5Unlawful disclosure

MAR 1.4.1UK

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MAR 1.4.1AEU

5[article 10 of the Market Abuse Regulation]

Descriptions of behaviour that indicate unlawful disclosure

MAR 1.4.2G

The following behaviours5 are indications of unlawful disclosure5:

  1. (1)

    disclosure of inside information by the director of an issuer to another in a social context; and

  2. (2)

    selective briefing of analysts by directors of issuers or others who are persons discharging managerial responsibilities.

Descriptions of behaviour that does not5 indicate unlawful disclosure

MAR 1.4.3G

5The following behaviour indicates that a person is acting in the normal exercise of their employment, profession or duties, if a person makes a disclosure of inside information:

  1. (1)

    to a government department, the Bank of England, the Competition Commission, the Takeover Panel or any other regulatory body or authority for the purposes of fulfilling a legal or regulatory obligation; or

  2. (2)

    otherwise to such a body in connection with the performance of the functions of that body.

MAR 1.4.4G

Disclosure of inside information which is required or permitted by Part 6 rules (or any similar regulatory obligation) may5 not amount to unlawful disclosure5.

MAR 1.4.4AG

4Disclosure of inside information by a broker to a potential buyer regarding the fact that the seller of financial instruments5 is a person discharging managerial responsibilities or the identity of the person discharging managerial responsibilities or the purpose of the sale by the person discharging managerial responsibilities where:

  1. (1)

    the disclosure is made only to the extent necessary, and solely in order to dispose of the investment;

  2. (2)

    the illiquidity of the stock is such that the transaction could not otherwise be completed; and

  3. (3)

    the transaction could not be otherwise completed without creating a disorderly market;

    may5 not, of itself, amount to unlawful disclosure5.

Factors to be taken into account in determining whether or not behaviour amounts to unlawful disclosure

MAR 1.4.5G

The5 following factors are to be taken into account in determining whether or not the disclosure was made by a person in the proper course of the exercise of his employment, profession or duties, and are indications that it was:

  1. (1)

    whether the disclosure is permitted by the rules of a trading venue5 a prescribed auction platform,3 of the FCA or the Takeover Code; or

  2. (2)

    whether the disclosure is accompanied by the imposition of confidentiality requirements upon the person to whom the disclosure is made and is:

    1. (a)

      reasonable and is to enable a person to perform the proper functions of his employment, profession or duties; or

    2. (b)

      reasonable and is (for example, to a professional adviser) for the purposes of facilitating or seeking or giving advice about a transaction or takeover bid; or

    3. (c)

      reasonable and is for the purpose of facilitating any commercial, financial or investment transaction (including prospective underwriters or placees of securities); or

    4. (d)

      reasonable and is for the purpose of obtaining a commitment or expression of support in relation to an offer which is subject to the Takeover Code; or

    5. (e)

      in fulfilment of a legal obligation, including to employee representatives or trade unions acting on their behalf.5

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  3. (3)

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MAR 1.4.5AG

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Examples of unlawful5 disclosure

MAR 1.4.6G

The following descriptions are intended to assist in understanding certain behaviours which may constitute unlawful disclosure under the Market Abuse Regulation:5

4444
  1. (1)

    4X, a director at B PLC has lunch with a friend, Y, who has no connection with B PLC or its advisers. X tells Y that his company has received a takeover offer that is at a premium to the current share price at which it is trading.

  2. (2)

    4A, a person discharging managerial responsibilities in B PLC, asks C, a broker, to sell some or all of As shares in B PLC. C discloses to a potential buyer that A is a person discharging managerial responsibilities or discloses the identity of A, in circumstances where the fact that A is a person discharging managerial responsibilities or the identity of A, is inside information5.

MAR 1.4.7G

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