Changes to MAR and PR for issuers on SME growth markets

The Market Abuse Regulation (MAR) and Prospectus Regulation (PR) have been amended for issuers on SME growth markets. In the UK, AIM is an SME growth market and so the changes are relevant to all issuers on AIM. The amendments (made by Regulation (EU) 2019/2115) are intended to reduce the administrative burden for issuers on those markets.

The designation of certain markets as “SME growth markets” was introduced to encourage small and medium-sized enterprises (SMEs) to use public markets by reducing the compliance costs for issuers on those markets.

Market Abuse Regulation

The changes to MAR include:

• Insider lists – Issuers on an SME growth market will have to maintain an insider list but will only have to include on it those persons who, due to the nature of their function or position within the issuer, have regular access to inside information. However, Member States will be able to require a full insider list to be maintained where justified by specific national market integrity concerns.
• Delay in disclosure of inside information – When an issuer on an SME growth market delays disclosure of inside information, it will not have to provide a written explanation of how the grounds for delay were met when it notifies the delay to the national competent authority (the Financial Conduct Authority in the UK). It will only be required to provide an explanation on request by the competent authority.
• PDMR dealings – When a PDMR notifies a dealing in shares to an issuer, the issuer will have two business days to disclose the dealing to the market from the date of notification (whereas on other markets both the notification by the PDMR to the issuer and the disclosure by the issuer to the market have to be made within three days of the dealing).

These changes will apply from 1 January 2021.

Prospectus Regulation

The changes to the Prospectus Regulation include amendments to the provisions on when a prospectus is required and when the simplified disclosure regime can be used. These changes apply from 31 December 2019.