Under Article 19(11) of the MAR, a person discharging managerial responsibilities may not conduct any own account transactions or transactions for the account of third parties, directly or indirectly, relating to the shares or debt instruments of the issuer or to derivatives or other financial instruments linked to them during a closed period of 30 calendar days before the announcement of an interim financial report or a year-end report which the issuer is obliged to make public according to the rules of the trading venue where the issuer’s shares are admitted to trading or national law.

Although Article 19(11) of the MAR does not explicitly refer to persons who are “closely associated” with the person discharging managerial responsibilities as defined in point (26) and Article 3(1) of the MAR, the prohibition of dealing under this rule also applies to indirectly conducted own account transactions or transactions for the account of third parties. Depending on the circumstances in individual cases, this may also include transactions that are conducted via or for the account of a closely associated person.

However, the prohibition of conducting transactions for the account of third parties that is applicable to persons discharging managerial responsibilities does not apply to transactions that a person discharging managerial responsibilities conducts as a member of a governing body or as a representative of the issuer¹ (e.g. in the case of bond issuances for the issuer).

ESMA takes the position that, if other conditions are met, “announcement” means the publication of preliminary business results. With regard to the year-end report, this means that a condition is that all key figures that are contained in the year-end report and that were adopted by the issuer’s management body are made public in the “announcement”.² This announcement then marks the end of the prohibition of trading imposed by Article 19(11) of the MAR. ESMA stresses that, under the MAR, there is only one closed period.

To calculate the period under Article 19(11) of the MAR, the date on which a relevant financial report is published is not counted. The 30-day period therefore begins on the 30th day before publication of the relevant financial report. The prohibition of dealing (closed period) ends on the date when a relevant financial report is published.

Example:

An unconditional contractual transaction entered into before the start of the closed period can be executed during the closed period. This follows from recourse to the evaluation of point (a) of Article 9(3) of the MAR. See also section II.2.2 and II.3.9.7.2.

Interim statements with content-related requirements, such as prescribed by section 53 of the Exchange Rules for the Frankfurter Wertpapierbörse (version dated 27 January 2020) are not deemed to be “interim reports” within the meaning of Article 19(11) of the MAR. In other cases of mandatory quarterly reporting, however – depending on the content-related requirements of the rules and regulations of a trading venue or national law – a different legal assessment cannot be ruled out.

A quarterly financial report with the content-related requirements provided for in section 53 (6) of the Exchange Rules for the Frankfurter Wertpapierbörse (version dated 27 January 2020) does not trigger any prohibition of dealing. Because this rule merely grants the issuer an option, this does not relate to a public disclosure to which the issuer is “obliged” by the rules of the trading venue, which would be a condition for a prohibition of dealing under point (a) of Article 19(11) of the MAR.

A half-yearly financial report with the content-related requirements provided for in section 21 (1)(b) of the General Terms and Conditions of the Deutsche Börse AG for the Regulated Unofficial Market (Freiverkehr) on Frankfurter Wertpapierbörse (version dated 9 December 2019) triggers a prohibition of dealing under Article 19(11) of the MAR. This is an interim financial report that the issuer must publish because of the rules and regulations of the trading venue.

Transactions that relate to an “employee share scheme”, an “employee savings plan” and an “entitlement to shares” are not subject to the prohibition of dealing, provided the conditions set out in point (b) of Article 19(12) of the MAR are met. Point (b) of Article 19(12) of the MAR is supplemented by Article 9 of Commission Delegated Regulation (EU) 2016/522, which gives examples of cases in which the issuer may permit a person discharging managerial responsibilities to trade on own account or for the account of a third party during a closed period. A situation where the issuer already resolved the corresponding scheme under which there may be an allotment, exercise, acquisition, etc. during the closed period is not sufficient to qualify as permission within the meaning of point (b) of Article 19(12) of the MAR. The reason is that the wording of Article 9(1) of Commission Delegated Regulation (EU) 2016/522 is based on a situation where the issuer may permit own account trading under certain circumstances. There are therefore no grounds for classifying a preceding resolution as advance granting of permission.

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