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SME Growth Market and MAR: What’s Next?

We look at changes to the Market Abuse Regulation relating to SMEs

by Ania Wojtus 2 min

    The European Securities and Markets Authority (ESMA) has granted some small changes to the Market Abuse Regulation (MAR) in response to the recent SME Growth Markets consultation. While more was hoped for, companies that belong to the SME Growth Market should now find it easier to comply with MAR.


    Since 3rd July 2019 the Market Abuse Regulation (MAR) has been a binding regulation throughout the European Union. For the SME Growth Market Segment (defined as companies with a capitalisation of up to €200 million), there has been a great deal of concern and debate about what should change due to challenges faced in meeting their obligations.

    For example, the documentation obligation and the burden of assessing what constitutes inside information has been problematic for SMEs who don’t have large teams to undertake the work. However, the dilemma was and continues to be whether certain practices that have been in place since MAR was implemented should be removed, simplified or kept the same.

    What changes have SMEs asked for?

    On 3rd October 2019 ESMA announced a consultation on changes to MAR for SME Growth Markets. Many law firms, issuers and industry bodies participated in the consultation and submitted detailed responses at the end of 2019.

    In Poland for example, responses emphasised the need to adapt MAR regulations to recognise the size of companies listed on the Warsaw Stock Exchange, many of whom have a market capitalisation of below €200 million.

    Changes requested included:

    • Precise rules for legitimately delaying the publication of inside information.
    • Maximum penalties ceiling proportional to issuer’s size, not exceeding 2% of annual revenues for SMEs.
    • Maximum penalty per manager for reporting errors not exceeding their annual salary.
    • Raising the limit for managers’ transactions to €20,000.

    How has the Securities and Markets Stakeholders Group at ESMA responded?

    The Securities and Markets Stakeholders Group at ESMA has granted small changes following initial responses to the consultation. This is however part of an ongoing revision by ESMA and the next update is expected in mid 2020.

    The changes granted are as follows:

    • Companies on an SME Growth Market only have to include on their insider lists those persons who, due to the nature of their function or position within the issuer, have regular access to inside information. However, member states may, where justified by specific national market integrity concerns, require issuers to include in their insider lists all persons who have access to inside information.
    • Persons Discharging Managerial Responsibilities (PDMR) notification: issuers were granted two extra business days to verify accuracy; however, the requirements to keep PDMR lists remains and this is unlikely to be changed by the more substantial MAR revision.
    • Issuers on the SME Growth Market will not be required to notify the national competent authority providing they can justify the decision for any disclosure delay.
      These measures will apply to companies listed on SME growth markets, irrespective of whether they are actually an SME. The changes are minor however should make it easier for entities to comply with MAR while remaining transparent and maintaining high compliance standards.
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    Ania Wojtus
    Ania Wojtus

    Business Development Director – EQS Group | Ania supports EQS Group as Business Development Director in the Polish market.