The 20 second summary
In Primary Market Bulletin No.9 (“PMB”), the FCA voices concerns over breaches of timeliness and content requirements for PDMR notifications and the failure to obtain guidance from sponsors on the correct application of the Listing Rules, the Prospectus Rules and the Disclosure and Transparency Rules (the “DTRs”).
The FCA are still considering the new Technical Note on sponsors’ obligations to deal with the FCA in an open and cooperative way and hope to finalise this in the next edition of PMB.
Transactions by persons discharging managerial responsibilities (“PDMRs”)
The FCA is concerned with the failure by PDMRs, their connected persons and issuers to meet the requirements in DTR 3. PMB No.9 cites examples of failings where it has had to issue a number of private warnings including:
- instances where PDMRs have entered into arrangements with third parties where the third party has agreed to make the notification to the issuer on the PDMRs behalf; and
- breach of DTR 3.1.2 (notification requirements) by connected persons of PDMRs.
The FCA has also taken this opportunity to remind premium listed issuers of the additional restrictions on dealing which are set out in the Model Code and which require not only premium listed companies to require PDMR’s to comply, and to take proper and reasonable steps to secure compliance by PDMRs, with the Model Code, but also PDMR’s to fulfil certain requirements when a connected person of a PDMR deals.
The FCA will consider taking public disciplinary action which could lead to public censure of the relevant party, depending on the seriousness of the breach, where they see breaches in this area. Consequential amendments to Technical Note 540.1 are proposed.
Seeking guidance from a sponsor
The FCA notes that issuers are failing to obtain guidance from sponsors, either because they have not realised the obligation exists or because they have undertaken their own analysis or assessment of possible relevant transactions and do no believe it is necessary to contact a sponsor. The FCA stresses the importance of contacting a sponsor when assessing significant and related party transactions, not least for the protection of shareholders.