clarification that the person receiving the market sounding is entitled to receive the information.notification of the recording of the telephone, audio or video call and that this requires the consent of the person receiving the market sounding.Prior to commencing an actual market sounding, the disclosing market participant shall inform the person receiving the market sounding of the following: Information disclosed and consents obtained prior to conducting a market soundingĪccording to Article 11.3 of MAR, prior to conducting a market sounding, a disclosing market participant shall specifically consider whether the market sounding will involve the disclosure of inside information and make a written record of its conclusion and the reasons therefor. In addition to internal instructions, adequate training of staff participating in market soundings plays an important role in the adoption of the procedures. In addition, procedures must specify the standard set of information that is always given to the recipients of information before actual sounding begins. The procedures must provide instructions that market sounding conducted by telephone is done only using recorded telephone lines, if a recording procedure is available. Procedures related to market soundings Disclosing market participantĪ disclosing market participant must have in place procedures relating to market sounding as well as the recording of calls relating to market sounding. Market sounding may take place, for example, orally in connection with a meeting, via an audio or video call, in writing or by means of electronic communications. Disclosure of information made in the course of a market sounding is deemed to be made in the normal exercise of a person’s employment, profession or duties where the disclosing market participant complies with the procedures specified in the above Articles. Market soundings and prohibition against disclosure of inside informationĬompliance with procedures in paragraphs 3 and 5 of Article 11 of MAR provides the disclosing market participant with a “safe harbour” with regard to suspicions of infringement of the prohibition against disclosure of inside information under Article 10 of MAR. A condition is that the parties need the information to form their opinion on the offering of securities, and the opinion on the arrangement of those receiving the market sounding can be reasonably considered necessary for making a decision on a takeover bid or merger. The regulatory standards relating to market sounding also apply with certain conditions to a situation in which a party planning to make a public takeover or merger discloses inside information to the parties entitled to the said securities, such as, for example, major shareholders. The disclosure of inside information to qualified investors in such contexts shall be deemed to be made in the normal exercise of a person’s employment, profession or duties, provided that there is an appropriate non-disclosure agreement in place. In accordance with Article 11 (1a) of MAR, communication of information to qualified investors for the purposes of negotiating the contractual terms and conditions of an issuance of bonds shall not constitute market sounding. Market sounding is typically done in connection with private placement arrangements and block trades. third parties acting on behalf or on the account of the above mentioned.
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