The European Securities and Markets Authority (ESMA) raised concerns about the legislative proposal for the Listing Act in a letter dated Friday 17 March addressed to Swedish finance minister Elisabeth Svantesson and MEP Irene Tinagli (S&D, Italian), Chair of the European Parliament’s Committee on Economic and Monetary Affairs.
Presented on Thursday 8 December by the European Commission (see EUROPE 13079/2), this proposal foresees that an issuer’s insiders list would no longer be event-based and would only need to include persons with regular access to inside information, so-called ‘permanent insiders’. According to ESMA, this part of the proposal may have two significant negative effects.
Firstly, ESMA is concerned that this could affect the ability of national competent authorities to combat market abuse. Under the proposal, identifying insiders will be a long and difficult process, which national competent authorities will have to conduct from scratch when investigating potential insider trading ex post, argued Verena Ross, Chair of ESMA.
Secondly, ESMA believes that the new regime would reduce the awareness of all insiders, as they will no longer be warned that they are in possession of inside information and will no longer be informed of the related obligations and prohibitions. This will increase the risk of unintentional insider trading, and it will also weaken issuers’ control over the flow of inside information, ESMA said.
The topic will be discussed by the EU Council’s Working Party on Financial Services and the Banking Union on Tuesday 21 March.
To read the letter: https://aeur.eu/f/5wh (Original version in French by Anne Damiani)