Our Summer Bulletin informs you of a number of operational updates relevant to issuers of debt securities listed on the Irish Stock Exchange (ISE). In this edition we highlight the following key developments:
- The key changes brought about by the new Market Abuse Regulation ("MAR");
- Updates to the Irish Stock Exchange's Listing Rules; and
- Introduction of 24-hour turnaround times for supplements.
Changes to the Market Abuse Regime
As you may be aware, 3 July 2016 brought about the introduction of a new market abuse regime across the EU, replacing the market abuse regime that has operated in Ireland for the last 11 years. MAR outlines the revised market abuse framework and, in contrast to the previous regime which is based on a 2003 Directive, MAR is a regulation and will consequently be directly effective in the EU Member States. Dispensing with the need for domestic legislation in the Member States will mean that application will be consistent across the EU.
The key changes to affect issuers of Irish listed debt securities are as follows:
- Issuers of debt securities listed on the Global Exchange Market of the Irish Stock Exchange ("GEM") will now fall under the scope of MAR;
- Issuers will be obliged to compile and maintain insider lists containing more detail than previously required;
- Dealings by persons discharging managerial responsibilities ("PDMRs") in debt securities listed on both the regulated market and GEM must now be disclosed (previously disclosure was required of dealings in shares only);
- The timelines for notification of transactions by PDMRs and connected persons has been reduced from four days to three;
- Delays in public disclosure of inside information and notification to the competent authority are permitted in limited circumstances;
- MAR is more prescriptive in relation to record keeping requirements for issuers; and
- Minimum administrative sanctions will apply to breaches and criminal sanctions are now applicable to breaches of the market abuse rules under S.I. No 349 of 2016. Criminal penalties for market abuse offences include fines of up to €5,000 or imprisonment for up to 12 months on summary conviction or, an indictment, fines of up to €500,000 or imprisonment for up to 3 years. Financial administrative sanctions of up to €1 million may be imposed where the CBI makes an adverse assessment against an individual and up to €15 million or 15% of total annual turnover for an adverse assessment against a legal person.
The PDMR template which must be completed and filed with the Central Bank of Ireland (CBI) can be found here. Walkers is happy to assist issuers with any such filings.
You may also wish to access a copy of our MAR advisory which offers a comprehensive overview of the new market abuse regime and can be found here.
Updated Listing Rules
Effective 3 July 2016, the ISE has updated its suite of listing rules relating to debt securities listing on the Main Securities Market (MSM) and GEM. While the changes introduced to the MSM Listing Rules predominantly reflect the revised market abuse regime, the ISE has taken the opportunity to review and update its GEM Listing Rules. The key points to note under the GEM Listing Rules are as follows:
- Subsidiary Guarantor Structures; Global Depositary Receipts and Life Settlement Structures: The ISE's practice notes relating to subsidiary guarantor structures, life settlements and GDRs have been incorporated into the GEM Listing Rules so that all such disclosure requirements and listing conditions are available from one source.
- MAR: The GEM Listing Rules now explicitly require the Issuer to comply with its obligations under MAR.
- More Prescriptive Continuing Obligations: The continuing obligations have become more prescriptive with the following matters now requiring an announcement to the ISE:
- any change of transfer or paying agent.
- the redemption or cancellation of debt securities in particular before the due date.
- any change to the scheduled maturity date of any existing listed security.
- any change of name of the Issuer.
- any payment default and in a more general manner, any decision relating to any bankruptcy, insolvency or cessation of payments.
- Listing Conditions: The listing conditions relating to convertible securities and asset-backed securities have been updated to cater for underlying equity securities listed on a Multilateral Trading Facility or non-EU markets which are deemed equivalent by the ISE.
- Disclosure requirements – tidy up:
- Inclusion of prescribed wording for ISE application statement;
- Removal of estimate of the total expenses related to admission to trading;
- Removal of details of taxes on income for derivatives;
- Definitive guidance is provided for fund-linked securities and credit-linked securities; and
- Removal of language and rules in relation to public offers.
A copy of the revised MSM Listing Rules and GEM Listing Rules can be found here.
24 hour turnaround times for Supplements
Effective 2 August 2016, the CBI and ISE will introduce a 24 hour turnaround time for the review of supplements meaning that comments on supplements submitted before 5pm on any given day will be returned by close of business on the following business day. This change has been warmly welcomed by stakeholders and signals the continued commitment of the ISE and CBI to provide a highly efficient service to issuers listing in Ireland.
While the impact of Brexit is expected to be profound for the Irish economy, the departure of the UK from the EU could create opportunities for Ireland, particularly for the Irish financial services industry, as Ireland will be the only native English speaking, common law jurisdiction remaining within the EU. Given Ireland's commitment to remain a member of the EU, we anticipate that it will be business as usual for all existing and future issuers who have listed their securities on the Irish Stock Exchange, whether on the MSM or GEM. In response to client queries we have published a suite of listings and capital markets advisories relating to the potential implications of Brexit which you may wish to access here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.