The Financial Services Act 2021: Three Key Changes for Issuers

Dechert LLP

Dechert LLP

On 29 April 2021 the Financial Services Bill 2019-21 received Royal Assent and the Financial Services Act 2021 (the “Act”) was published. This OnPoint sets out three key aspects of the Act and the implications for issuers.

1. Timing for notification of PDMR transactions

The UK Market Abuse Regulation (“UK MAR”) provides that persons discharging managerial responsibilities (“PDMRs”) and persons closely associated with them (“PCAs”) are under an obligation to notify the FCA and the relevant issuer of transactions in that issuer’s shares no later than three working days following the date of such transaction.

Section 30 of the Act amends Article 19(3) of UK MAR so that issuers are required to disclose transactions by PDMRs and PCAs to the public within two workings days of receipt of the notification from the PDMR / PCA (rather than no later than three business days after the date of the transaction).

Working days means any day other than Saturday, Sunday, bank holidays, Christmas Day or Good Friday. The change from business days to working days is not expected to have a meaningful impact but the extension of the timetable within which issuers are required to disclose is likely to be welcomed by issuers.

2. Insider lists

Section 30 of the Act also amends Article 18 of UK MAR relating to insider lists. The changes clarify that issuers and any person acting on their behalf or on their account are required to maintain an insider list (rather than issuers or any person acting on their behalf or on their account). The Act also provides that where another person is requested by the issuer to draw up and update the issuer’s insider list, the issuer will remain fully responsible for complying with the obligations under Article 18 of UK MAR.

3. Insider dealing

Section 31 of the Act extends the maximum sentence for the criminal offence for insider dealing from seven years to 10 years.

The changes outlined above in section 30 of the Act will come into force on 29 June 2021. The commencement date for section 31 has not yet been announced.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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