In December 2019 the FCA fined a PDMR for a breach of the Market Abuse Regulations (MAR). Under MAR, PDMRs are required to notify the Company and FCA of every market transaction they carry out within three business days. The individual in question failed on multiple occasions to request permission to trade (as per the Companies Share Dealing Policy) or notify the Company or FCA once trades had been undertaken.
Whilst it wasn’t found that the individual had traded whilst in possession of any ‘Inside Information’, the regulations had still been breached. Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said:
‘Transparency of trading by directors and other responsible officers is a key element of market integrity and helps to police the market against illegal insider trading. Directors of listed companies…must ensure they report their trading on time or risk undermining market integrity.’
This case, resulting in a £45,000 fine for the individual, highlights the risk of ignorance when it comes to MAR. Educating senior employees is vitally important for Companies as it helps mitigate both Company and personal risk for the individual.