If you work for a company which has securities listed on any securities exchange within the EU, or a corporate advisor or other service provider YOU may come into contact with inside information from time to time – DO YOU KNOW WHAT TO DO?

Following the implementation of the Market Abuse Regulation (MAR) which came into force on 3 July 2016, the GC100 (a collection of the senior legal officers of FTSE 100 companies) along with ICSA and the QCA has published both a summary of the Q&A responses to its member poll in respect of the implementation of MAR together with guidance as to the maintenance of insider lists.

1. ICSA, the GC100 and the QCA specimen dealing policy, code and manual
2. ICSA: The Governance Institute, GC100, the Quoted Companies Alliance and other market participants agreed that it would be of great benefit for listed and quoted companies to be able to turn to an equivalent version of the FCA’s Model Code with the introduction of a single, industry-led dealing code rather than a variety of, no doubt broadly similar, codes which would potentially create confusion in the market.
3. This guidance note contains:
   1. A general introduction
   2. A ‘specimen’ group-wide dealing policy.  Some companies may wish to issue this to all employees as an introduction to the concept of market abuse.
   3. A ‘specimen’ dealing code. The assumption is that companies will probably wish to issue this to PDMRs and those other individuals whom they wish to be covered by the company’s process.
   4. A ‘specimen’ dealing procedures manual for the use of the company secretary or whoever else in the company is responsible for the implementation and management of the systems and procedures for its clearance procedures for dealing by PDMRs and other individuals to whom dealing restrictions apply.
4. These documents should be reviewed by the company to reflect their own individual circumstances and requirements.
5. MAR dealing Code and Policy Document

Together the Q&A and the guidance provide a helpful steer to both companies and advisors on the practical approach to take in maintaining insider lists in accordance with MAR.

By following the GC100’s lead, companies can ensure they do not fall foul of the new obligations, and advisors can both limit their own exposure and ensure their clients are adequately protected.

As part of the changes implemented by MAR, both the previous requirements for a company to maintain a register of people with inside information, and the extent of the information on each person to be recorded, have been extended. MAR also places an obligation on a company to take all reasonable steps to ensure each individual person with inside information acknowledges, in writing, the duties entailed for holding inside information and the potential sanctions for breach.

Initial thoughts

These new requirements could add a significant administrative burden onto the relevant company, particularly in recording information in respect of the employees of its advisors.   However, the overwhelming consensus of the GC100 from the Q&A is that, in practice, those GC100 companies will continue to rely on their advisors themselves to maintain insider lists in respect of their own staff.

The guidance does suggest that companies should take certain steps to ensure the disclosure of inside information to its advisors is carefully logged and, in certain circumstances, agreements with its advisors are put in place.

From an advisor’s perspective, the MAR requirements for information to be contained in an insider list, and for obtaining consent, should be applied equally by the advisor.

This will likely require advisors to adopt MAR compliant procedures for receiving and distributing inside information amongst its own staff, if not already in place, and advisers should be considering this to the extent they work with companies with listed securities to avoid both legal sanction and the risk of damaging client relationships.