MAR market sounding: optional safe harbour or compulsory rule

Author: Amélie Labbé | Published: 1 Feb 2018

Article 11 of the Market Abuse Regulation (MAR) has been the cause of many headaches for capital markets participants.

It’s a major change from the previous regime issuers were used to because a prescriptive regime is triggered as soon as insider information on a transaction is disclosed.

It introduces the concept of market sounding – defined broadly as the communication of information to judge investor interest before a transaction – which has been subject of much discussion since it was officially introduced in 2016. Its exact scope remains a work in progress especially as it pertains to the breadth of instruments covered.

When is a transaction officially announced?One of the areas that’s still subject to debate is the mandatory character of the market sounding rules. According to Cleary Gottlieb counsel Géraldine Bourguignon, it’s still up for debate if they are a mandatory prescriptive regime or an optional safe harbour which parties can...


 

 

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