Stand:updated on 25.01.2021 | Topic Managers' transactions Managers’ transactions
If capital markets are to be transparent, market participants must be able to have some idea of when members of management or supervisory boards are dealing in financial instruments issued by their own company. Article 19 of the Market Abuse Regulation (EU) No 596/2014 (MAR) therefore requires managers’ transactions to be notified and published.
Notification requirement for managers’ transactions
If a person discharging managerial responsibilities within an issuer deals in financial instruments issued by the issuer itself (e.g. shares or bonds), such managers’ transactions should not remain hidden from investors. This is one of the important elements of transparency in the capital markets. The Market Abuse Regulation (EU) No 596/2014 requires members of the management or supervisory bodies of an issuer in particular as well as any other persons with regular access to inside information who take important managerial decisions to notify both the issuer and the competent authority (BaFin) of transactions conducted on their own account relating to shares or debt instruments of the issuer which are traded on the financial markets or financial instruments linked thereto (e.g. derivatives) within three business days.
The notification requirement also applies to spouses, registered civil partners, dependent children and other relatives living with them in the same household for at least one year. The same goes for legal persons, trusts (such as foundations) or partnerships closely associated with persons discharging managerial responsibilities.
Proprietary business is subject to the notification requirement once a total amount of €5,000 has been reached by the end of the calendar year. BaFin has raised the threshold from €5,000 to €20,000 by way of a general administrative act, effective as of 1 January 2020.
Please note
BaFin provides a database of all notified and published managers’ transactions on its website.
Publication obligation for issuers
The issuer is responsible for ensuring that transactions subject to the notification requirement are published by media suitable for the dissemination of the information throughout the European Union within two working days after the issuer receives a notification to this effect from the person discharging managerial responsibilities or a person closely associated with them. In addition, the issuer is required to forward the published information to the company register, which stores it.
Prohibition on trading ahead of interim financial reports or year-end reports
Regardless of the notification requirement for managers’ transactions, a person discharging managerial responsibilities is not allowed to conduct any transactions relating to the shares or debt instruments of the issuer or to other financial instruments linked thereto during a closed period of 30 calendar days before the announcement of an interim financial report or a year-end report (Article 19(11) of the MAR).
