On 20 March 2023, the European Securities and Markets Authority (ESMA) published a letter, addressed to the European Parliament and Council, raising concerns over proposed changes to the insider list regime in the Market Abuse Regulation.
The proposed changes, put forward by the European Commission (Commission) in December 2022 as part of the Listings Act proposal, mean that insider lists would only include persons who have regular access to inside information and not those who may have access to such information on a case-by-case basis.
The letter sets forth that, overall, ESMA welcomes the proposal as it reflects a number of recommendations that it previously made to the Commission. However, there is one specific element of the proposal which ESMA has substantial concerns.
Under the proposal, the new insider list will not cover those persons working for the issuer who have irregular access to inside information and thus limiting the ability of Member State national competent authorities (NCAs) to quickly identify non-permanent insiders. Moreover, the NCAs will not be able to use the list to assess which permanent insider accessed each piece of information and when. Therefore, the identification of insiders will be a lengthy and difficult process.
Furthermore, the second detrimental effect would be on issuers, as they use insider lists to manage inside information, thus protecting both themselves and their staff/third parties. For example, the new regime would diminish awareness by all insiders, as they will no longer be notified that they are in possession of inside information and be informed about the relevant obligations and prohibitions.