Kategori: Potential sanctions against MAR regulated companies

There would normally be no immediate consequences. NCAs do not perform constant controls on all companies regulated under MAR but would rather act upon specific decisions of an NCA. In case of an investigation, the NCA would most likely detect any inadequacies and, as a result, evaluate the extent of the violation and decide on appropriate sanctions to impose. Notably also, the NCAs and ESMA have developed an advanced cross-border technical cooperation standard for sanctions and measures.

MAR regulates not only which infringements are subject to certain sanctions, but also elaborates on which sanctions may be imposed upon the regulated company itself as well as upon natural persons on a case by case basis.

Relating to the above infringements, the below MAR sanctions summary is limited to administrative sanctions and does not include e.g. illegal insider trading, which carries significantly more severe consequences including criminal prosecution for financial crimes under national law. Such sanctions include:

• withdrawal of the authorisation of an investment firm;
• a public warning indicating the person responsible for, and nature of, the infringement;
• a cease and desist order for the person responsible for the infringement (to repeat that conduct);
• a temporary or in some cases even permanent ban of a PDMR within an investment firm (or any other natural person), who is held responsible for the infringement, from exercising management functions in investment firms;
• a temporary ban of a PDMR within an investment firm (or another natural person), who is held responsible for the infringement, from dealing on own account;
• disgorging profits gained due to the infringement;
• max administrative pecuniary sanctions of at least 3 times the amount of the profits gained due the infringement;
• for a natural person, max administrative pecuniary sanctions of at least:
• EUR 5 000 000 for art. 14 or 15 infringements;
• EUR 1 000 000 for art. 16 or 17 infringements;
• EUR 500 000 for art. 18, 19 or 20 infringements;
• for a legal person, max administrative pecuniary sanctions of at least:
• EUR 15 000 000 or 15 % of the total annual turnover for art. 14 or 15 infringements;
• EUR 2 500 000 or 2 % of the total annual turnover for art. 16 or 17 infringements;
• EUR 1 000 000 for art. 18, 19 or 20 infringements.

The sanctions for incorrect handling of the requirements for PDMRs (article 19) covers, amongst others, the following items:

• Failure to create or update the list of PDMRs without delay
• Lack of information to PDMRs with regards to MAR
• Unnecessary delay in submitting the list to the NCA
• Lack of information from a PDMR to their close associates with regards to MAR
• the requirements on investment recommendations (art. 20).

MAR sanctioned infringements include failures to comply with:

• the prohibition of insider dealing and of unlawful disclosure of inside information (art. 14);
• the prohibition of market manipulation (art. 15);
• the requirements concerning prevention and detection of market abuse (art. 16);
• the requirements on Public disclosure of inside information (art. 17);
• the requirements on management of the insider list (art. 18), including;
• failure to promptly create or update an insider list;
• lack of information to, or information collection from, insiders regarding MAR;
• missing dates and time-stamps for changes in the insider list;
• dissemination of insider list information to non-authorised persons;
• inadequate archiving of the insider list and related previous versions;
• unnecessary delay in submitting the insider list to the NCA;

EU regulation 596/2014 contains definitions and obligations:

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32014R0596