The new insider list of companies whose instruments are admitted to trading on Euronext Growth Milan
From 4 August 2022, Implementing Regulation (EU) 2022/1210 adopted by the European Commission last 13 July 2022 (“Regulation“), laying down implementing technical standards for the application of Regulation (EU) No. 596/2014 (so-called Market Abuse Regulation, “MAR“) with regard to the format of the lists of persons having access to inside information (insider lists) and their updating, will come into force.
The Regulation is based on, and amends, the draft implementing technical standards (“ITS”) prepared by the European Securities and Markets Authority (ESMA) regarding the format of the new insider list and the information therei (). As a result of the adoption of such Regulation, therefore, previous Implementing Regulation (EU) 2016/347 of 10 March 2016 (“Regulation 2016/347”) will be repealed.
The regulatory intervention is part of the changes made to MAR by Regulation (EU) 2019/2115, which, as is known, introduced, inter alia, less burdensome obligations for issuers admitted to trading on SME growth markets, such as Euronext Growth Milan (“Issuers”), on insider list keeping, with the aim of limiting compliance costs for Issuers as much as possible.
In so providing, the Commission has upheld the proposal indicated in the framework of the work of the Technical Expert Stakeholder Group (TESG) on SMEs and referred to in the Final Report “Empowering EU Capital Markets For SMEs – Making listing cool again” ().
New Article 18( 6) of MAR indeed allows Issuers to include in their insider lists only those persons who, due to their function or position within the issuer, have regular access to inside information (so-called insider list – regular access) (Article 18(6)(1) of MAR), thus broadening the scope of persons falling within the category of persons to be included in the so-called permanent section under -repealed- Article 2(2) of Regulation 2016/347 [the “persons who have access at all times to all inside information” ()].
By way of example, persons having regular access may include executive directors, members of management and supervisory bodies, CEOs, CFOs, heads of Legal sand in-house counsel () as well as their staff.
In such context, the Regulation specifies that the insider list – regular access may include only the personal details of persons having regular access to inside information (“Relevant Persons”) (see Article 2(1)). It is further provided that such list shall be drawn up using the format set out in Annex II to the Regulation, and therefore shall contain the following information: (i) date and time of creation of the List and last update; (ii) date of transmission to the competent Authority; (iii) name, surname and surname at birth (if different) of the Relevant Person; (iv) professional telephone number of the Relevant Person; (v) company name and address of the Relevant Person; (vi) function and reason for accessing the inside information on a regular basis (vii) the date and time at which the Relevant Person obtained regular access to the inside information; (viii) the date and time at which the Relevant Person ceased to have regular access to the inside information; (ix) personal identification number (if applicable) or otherwise date of birth; (x) personal full home address (street name, street number, city, post/zip code, country) of the Relevant Person; and (xi) personal telephone number of the Relevant Person. However, the specific information to which the Relevant Person has access is not required.
Hence, the new Regulation exempts Issuers from the obligation to create different sections of the insider list for each piece of inside information, or from the obligation to activate occasional sections. Moreover, the possibility of adding a permanent section to the list is not foreseen.
Alternatively, if requested by Member States due to specific national market integrity concerns, Issuers are allowed to include all persons having access to such information in the list, but in a simplified form (so-called simplified insider list) (Article 18(6)(2) of MAR) ().
Finally, the Regulation provides that lists of persons with access to inside information must be kept in any form suitable to ensure that the completeness, integrity and confidentiality of the information included in such lists is preserved at all times during transmission to the competent authority. Issuers may therefore keep their insider list also in a format other than electronic format, provided that the completeness, integrity and confidentiality of the inside information is preserved ().
The content of this article is for information purposes only and is not, and cannot be intended as, professional advice on the matters dealt with. For further information please contact Lukas Plattner and Giacomo Abbadessa.
() See the consultation paper published by ESMA on 6 May 2020 and the Final Report published by ESMA on 27 October 2020. The Regulation is in open conflict with the position of ESMA, as most recently expressed in the opinion adopted on 29 April 2022 (“Opinion – On the European Commission’s proposed amendments to the draft implementing Technical Standards on the precise format of insider lists and for updating insider lists adopted under MAR”), in particular, failing the indication of the specific information to which the persons in the list have regular access (see below).
() See Final Report “Empowering EU Capital Markets For SMEs – Making listing cool again”, May 2021, page 76: “With regard to the drawing up of the insider list, at the time of its entry into force, MAR exempted issuers admitted to trading on the SGM from the burden of keeping the insider list, thus guaranteeing them cost savings, subject to compliance with certain conditions. The SGM regulation adopted in 201921 has provided, for issuers admitted to trading on an SGM, the option to keep the insider list in a simplified form, which shall include all persons having regular access to inside information relating to the issuer. In this context, it is worth noting that the above-mentioned Regulation has entrusted ESMA with the task of drawing up the draft Implementing Technical Standards specifying the format of the new insider list and the information to be included in it. Such technical standard should clarify that SGM issuers are obliged to maintain only one list of persons having regular access to insider information and are not required to create event-based sections of the insider list each time, in which the details of persons with access to a single piece of inside information are recorded so to alleviate MAR regime and reduce compliance costs associated with it”.
() According to Assonime, the wording “persons who have access at all times to all inside information” would narrow the category of “permanent” insiders to a few persons: “executive directors, the chairman, who may also be a non-executive director insofar as he is responsible for setting the agenda for board meetings and ensuring that the pre-council briefing reaches the directors, the chief executive officer, if any, and his staff” (see Assonime, La disciplina sugli abusi di mercato: problemi e incertezze nell’applicazione per le società italiane e alcune ipotesi interpretative, Note e Studi, 15/2016).
() See Recital (10) of Regulation (EU) 2019/2115. According to CESR’s guidelines to the Market Abuse Directive (Directive 2003/6/EC), categories of persons who typically may have access to inside information include “members of the board of directors, CEOs, relevant persons discharging management responsibility, related staff members (such as secretaries and personal assistants), internal auditors, people having access to databases on budgetary control or balance sheet analyses, people who work in units that have regular access to inside information (such as IT people)” (CESR, Level 3 – Third set of CESR guidance and information on the common operation of the Directive to the market, paragraph 15).
() The obligation to include a specific section for each piece of inside information, as well as the option to set up a separate section for permanent access, still apply to the simplified insider list (see Article 2(2) of the Regulation).
() Pursuant to Article 18(5) of MAR, the insider list shall be retained for at least five years after it is drawn up or updated.