Welcome to the monthly capital markets update, a briefing from our capital markets practice area rounding up the month’s regulatory developments within the equity and debt capital markets and looking ahead to future developments.
Malta Update
UPDATE NUMBER 12/2024/01
The Malta Financial Services Authority (‘MFSA’) has issued amendments to the Prevention of Financial Markets Abuse Rules, aligning with changes introduced by the EU Listing Act Package, which modifies the Market Abuse Regulation (‘MAR’).
One significant amendment involves the threshold for reporting transactions by persons discharging managerial responsibilities (PDMRs) and their closely associated persons (PCAs). Previously, these individuals were required to notify the issuer and the competent authority of transactions exceeding EUR 5,000 in a calendar year. The threshold has now been raised to EUR 10,000 by the MFSA, with flexibility under Article 19(9) of MAR for national authorities to set thresholds between EUR 10,000 and EUR 50,000 based on local market conditions. Transactions are aggregated without netting to determine if the threshold has been reached.
To implement this change, the MFSA has introduced a new rule, R3-3.3, within its Prevention of Financial Markets Abuse Rules. This rule stipulates that once a total of EUR 10,000 in transactions is reached within a calendar year, any subsequent transaction must be reported. This amendment is effective as of December 4, 2024. Transactions carried out before this date will be subject to the previous EUR 5,000 threshold.
UPDATE NUMBER 12/2024/02
On 9 December 2024 the MFSA issued a Circular on the reporting of infringements under the MAR. Please find a summary of the key updates below.
- New Reporting Mechanism
- A standardised form for reporting actual or potential infringements is now available on the MFSA website. Reports can be submitted anonymously or with identity disclosure (the latter is encouraged for follow-ups).
Please refer to the Circular for the purpose of accessing the form.
- Protections
- Reporting persons are protected against retaliation and discrimination. Confidentiality of both the reporter and the reported party is maintained, except when disclosure is required by law.
- Submission Options
- Reports can be submitted orally, in writing (via email or post), or through meetings with the MFSA. Anonymous reports should be sent by post.
- Acknowledgment & Follow-Up
- The MFSA will issue a reference number for all reports (except anonymous ones). Further details may be requested if necessary.
- Data Privacy
- All personal data will be handled in accordance with data protection laws, with strict confidentiality ensured.
This updated framework aims to enhance transparency and compliance with MAR.
European Union Update
UPDATE NUMBER 12/2024/03
The European Commission published its frequently asked questions (FAQs) on the EU Taxonomy Regulation including general requirements of the Regulation and clarifications on the technical screening criteria for specific activities outlined in the Taxonomy Environmental Delegated Act, and the Taxonomy Climate Delegated Act. In addition, the FAQ, which contains 155 questions, provides general clarifications on the Do Not Significant Harm criteria and the Taxonomy Disclosures Delegated Act.
The FAQs have been approved in principle by the Commission, and their formal adoption will take place once the translation into all EU languages is finalised and they are published in the EU Official Journal.
UPDATE NUMBER 12/2024/04
On 14 November 2024, the EU Listing Act Package was published within the Official Journal of the EU. The Listing Act includes inter alia the Listing Act Directive (Directive (EU) 2024/2811) and the Listing Act Regulation (Regulation (EU) 2024/2809) (the ‘Amending Regulation’), with the latter amending the Prospectus Regulation, the Market Abuse Regulation (‘MAR’), and the Markets in Financial Instruments Regulation (MiFIR).
The key updates, effective December 4, 2024, aim to streamline compliance and adapt to current market practices.
- Prospectus Regulation
The amendments aim to simplify the process for issuers and improve clarity for investors.
- Exemption Removal
- The EUR 1 million threshold for exempt offers has been eliminated. New exemptions apply to securities fungible with those traded for at least 18 months or admitted to certain SME growth markets, subject to conditions.
- Thresholds and Percentages
- Aggregated consideration thresholds for certain exemptions doubled to EUR 150 million. Relevant percentages for certain scenarios (e.g., share capital issuance) increased from 20% to 30%.
- Risk Factors
- Prospectuses must now avoid generic disclaimers and instead provide clear, specific descriptions of risks and their impact.
- Approval Process
- Universal registration documents approved for one year can be filed subsequently without prior approval.
- Formatting and Transparency
- Clearer guidelines on the structure and content of documents, including specific conditions for offering fungible securities.
- Prospectuses approved before June 4, 2026, remain governed by the existing rules until the end of their validity. Special provisions apply to prospectuses approved under Articles 14 and 15, valid until March 4, 2026.
- Market Abuse Regulation
These changes address transaction reporting and enhance market transparency.
- PDMR Notification Threshold
- Increased to EUR 20,000 as per the EU framework. The MFSA, exercising its discretion, has reduced the threshold to EUR 10,000 for notifications within Malta.
- Disclosure of Inside Information
- Expanded to include information conveyed by persons acting on a client’s behalf or information from managed funds or proprietary accounts.
- Market Soundings
- Simplified procedures for determining when disclosures qualify as lawful communication. Exemptions introduced for both disclosing market participants and market sounding recipients.
- Insider Lists
- Reduced administrative burden by removing requirements for specific formats previously mandated by EU regulations.
- Buy-Back Programs and Stabilization
- Trade disclosures must now be in aggregated form and directed to the most relevant market authority by liquidity.
For more detailed information on the updates and amendments please refer to the Circular.
