The European Securities and Markets Authority (ESMA) the EU’s financial markets regulator and supervisor, has sent a letter to the European Parliament and Council raising concerns with proposed changes to the insider list regime in the Markets Abuse Regulation.

The proposed changes, which were put forward by the European 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 outlines how the proposed changes may lead to detrimental effects for national supervisors and their ability to enforce against market abuse, as well as for issuers, who use insider lists to manage the flow and access to inside information.

Listing Act legislative proposal – Insider List Regime
Dear Ms Svantesson, dear Ms Tinagli,
On 8 December 2022, the European Commission published its Listing Act proposal, which
aims to alleviate the administrative burden for companies of all sizes so that they can better
access public funding by listing on stock exchanges.
Overall, ESMA welcomes this proposal, which aims to deliver on the 2020 CMU Action Plan’s
commitment to simplify EU listing rules. The proposal reflects a number of recommendations
that ESMA has previously provided to the European Commission, both in response to the
Listings Act public consultation, and in our advice on the Market Abuse Regulation review1 2
.
However, following discussion within the ESMA Board of Supervisors, I would like to share our
views regarding one specific element of the proposal on which we, collectively as EU securities
regulators have substantial concerns.
The proposal amends Article 18 of MAR, stipulating that an issuer’s insider list would no longer
be event-based and would only need to include those persons that have regular access to
inside information (so-called “permanent insiders”). We believe that this proposal may have
two significant detrimental effects.
The first one concerns National Competent Authorities (NCAs) ability to enforce against market
abuse.
Under the proposal, the new insider lists will not cover those persons working for the issuer
who have irregular access to inside information and thus limiting the ability of NCAs to quickly
identify non-permanent insiders. Moreover, NCAs will not be able to use the list to assess which
permanent insider accessed each piece of inside information and when. As a result, the identification of insiders will be a lengthy and difficult process that National Competent
Authorities will have to carry out from zero when investigating potential insider dealing ex-post.
Additionally, while the proposal will not directly impact the insider list drawn up by advisors and
consultants, their ability to produce their insider list in a timely manner will be affected as they
will no longer be added to the issuer’s list and therefore will not receive the relevant notification.
Furthermore, NCAs will not be aware of the access of such advisors and consultants to the
issuer’s inside information.
The second significant 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. Not only will this lack of awareness increase the risk of unintended
insider dealing, but it will also weaken the issuers’ control of the flow of inside information.
We would appreciate it if you could take these concerns, expressed by the securities
supervisors that are responsible for maintaining orderly and fair European markets, into
consideration during the course of your legislative discussions.
Should you or your staff require any further information please do not hesitate to contact me or
Carsten Ostermann, Acting Head of the Market and Digital Innovation Department
([email protected])