22 August 2019 – need2know

The Market Abuse Regulation (MAR) has established uniform rules throughout Europe for core elements of capital market law such as ad-hoc announcement obligations, insider surveillance and directors’ dealings. Since July 2019, the German Federal Financial Supervisory Authority (BaFin) has been conducting a consultation on an Issuer Guideline. The approaches of the German regulator offer helpful starting points for the Austrian practice.

In July 2019, the German Federal Financial Supervisory Authority (BaFin) published a new part of its Issuer Guideline for consultation. Module C deals with the very practice-relevant topics of ad-hoc notification requirements (disclosure requirements for inside information, insider surveillance, directors’ dealings (notification of manager transactions) and prohibition of market manipulation). The Issuer Guideline relates to the administrative practice of the German regulator (Federal Financial Supervisory Authority – BaFin).

The competent authority in Austria is the Austrian Financial Market Authority (FMA). Of course guidelines of the German BaFin are not binding with respect to Austrian administrative practice, and the FMA is even stricter in some respects. Such as the directors’ dealings announcements reporting requirement for pure dual mandates. However, the Issuer Guideline of the German regulator undoubtedly offers very helpful starting points for the application of the MAR rules for Austrian issuers.

As to main contents: The concept of inside information as reference point for ad-hoc announcement obligations and the ban on insider trading ware analysed in detail. The guideline describes case groups (M&A transactions, personnel decisions, court proceedings, insolvency-related situations) for dealing with the ad-hoc announcement obligation in the case of protracted process. In this case, the time of the emergence of inside information (precise nature, non-public significant price-effect) is often difficult to determine. The ad-hoc relevance of business figures and forecasts is also instructive.

The guideline also describes exemptions from insider dealing which are not explicitly provided by the MAR: the lack of causality between the knowledge of inside information concerning the realisation of collateral by lending banks, the “master-plan exception” (e.g. stake building) or the “face-to-face exception” (same level of knowledge of the contracting parties).

It remains to be seen whether the FMA will take the BaFin issuer guidelines as starting point to update its own Issuer Guidelines.

Questions? Please contact:
Christoph Nauer 
Elke Napokoj 
Daniel Reiter
Roland Juill

Practice Groups:
Corporate
M&A
Capital Markets, Banking & Finance 

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