December 6, 2019

Should administrative staff be included on insider lists?


Bob, a managing director at ABC bank, is working on a large advisory mandate on behalf of his client, XYZ plc, an energy company listed on the London Stock Exchange. XYZ plc is acquiring one of its main competitors, Energise Limited, but this information has not yet been made public.

 Bob asks his personal assistant, Mary, to proof-read deal-specific slides on the proposed transaction that he will be presenting to the board of XYZ plc tomorrow. Mary has also been involved in other aspects of matter administration including making call notes, printing documents relating to the transaction and organising all-party meetings.

Key considerations

  • The Market Abuse Regulation (MAR) provides that issuers, such as XYZ plc, and any person acting on their behalf, such as ABC bank, must draw up a list of all persons that have access to inside information and who are working for them under a contract of employment or otherwise performing tasks through which they have access to inside information.
  •  The information relating to the transaction would meet the definition of inside information under MAR as it is precise, has not been made public, relates directly to the share price of XYZ plc and if made public is likely to have a significant effect on the price of its shares.
  • Mary has access to this information by virtue of her employment and is therefore an “insider”.  She should be added to the insider list if she has not been already. The insider list should be in a standard prescribed format.  
  • ABC bank should consider whether any other administrative staff alongside the deal team should be included on the insider list. Individuals who have the ability to access inside information such as IT staff, but whose duties do not require them to access inside information, do not need to be included unless they actually access the information. 
  • ABC bank must take all reasonable steps to ensure that Mary acknowledges in writing the legal and regulatory duties which result from being in possession of inside information  and the sanctions applicable to insider dealing and unlawful disclosure of inside information.
  • ABC bank must keep the insider list up-to-date at all times and update the list promptly, specifying the date and the time when the change that triggered the update occurred.