Overview of MAR Permanent Insider Lists
The interpretation of Article 18 of the Market Abuse Regulation (MAR) in the UK and EU has led to various understandings of the role and requirements of permanent insider lists. Here’s an explanation to help navigate these complexities:
Permanent Insider List: Voluntary, Not Mandatory
A permanent insider list is optional and not a mandatory requirement under MAR. The permanent insider section, introduced by Commission Implementing Regulation (EU) 2016/347, was designed to avoid repetitive entries of personal details for permanent insiders across multiple event-based lists. Its purpose, as highlighted in recital (4) of the Regulation, is to prevent duplicative entries of the same individuals in different sections of the insider lists. For a more detailed discussion on the topic, have a read of EMSA's view on insider lists, found here.
Who Should be on the Permanent Insider List?
This section should include only those individuals who, by the nature of their role or position, have continuous access to all inside information within the company. Typically, this might include key executives like the CEO, CFO, or Chairman. However, the list should be very limited to those who genuinely need this level of access.
Event-Based Lists: Still Necessary
Even with a permanent insider list, companies must still maintain event-based insider lists. These lists are essential for tracking who has access to specific pieces of inside information as they arise. The European Securities and Markets Authority (ESMA) has emphasized that the permanent insider list is supplementary and should not replace event-based lists.
Practical Use and Cautions
While smaller issuers might use the permanent insider list to reduce administrative burdens, ESMA and various compliance experts advise caution. Permanent insiders must be aware of all inside information at all times, which can be impractical. Moreover, permanent insiders face more stringent trading restrictions, including potential bans on trading company shares.
Conclusion
Using a permanent insider list can streamline certain administrative tasks but should be used judiciously and in conjunction with comprehensive event-based lists. The overarching goal is to ensure transparency and prevent market abuse by maintaining accurate and up-to-date records of who has access to inside information at any given time.
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