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Market Abuse Regulation: PDMR Transactions and Notifications

market abuse regulation

The Market Abuse Regulation (MAR) has been designed to prevent and detect market abuse, market manipulation and insider dealing. It replaces the previous Market Abuse Directive (MAD) to ensure higher market integrity across the European Union.

One poignant dimension of market abuse referred to in the regulation is the matter of those with managerial responsibilities, often referred to as PDMRs.

Persons Discharging Managerial Responsibilities (PDMRs) within issuing entities and Persons Closely Associated (PCAs) must follow stringent PDMR market abuse protocols outlined in MAR.

Read this guide to understand:

  • Who is classed as a PDMR and PCA
  • The importance of and process for PDMR notifications
  • The rules on closed periods
  • Potential market abuse penalties for PDMRs breaching MAR

1. What is a Person Discharging Managerial Responsibilities (PDMR)?

According to MAR, the official verbatim definition of a PDMR is a:

"Person discharging managerial responsibilities’ means a person within an issuer, an emission allowance market participant or another entity referred to in Article 19(10), who is: 

(a) a member of the administrative, management or supervisory body of that entity; or 

(b) a senior executive who is not a member of the bodies referred to in point (a), who has regular access to inside information relating directly or indirectly to that entity and power to take managerial decisions affecting the future developments and business prospects of that entity;"
 (MAR Article 3(1.25))

This refers to any person employed by an issuer who holds managerial responsibilities that provide insight into trades, financial instruments, and insider information.

Since managerial personnel have the capacity to use this information to illegally gain an advantage over the market, MAR strictly regulates the protocols to prevent PDMR market abuse.


2. What is a closely associated person (PCA)?

As defined by MAR:

"person closely associated’ means: 

(a) a spouse, or a partner considered to be equivalent to a spouse in accordance with national law; 

(b) a dependent child, in accordance with national law; 

(c) a relative who has shared the same household for at least one year on the date of the transaction concerned; or 

(d) a legal person, trust or partnership, the managerial responsibilities of which are discharged by a person discharging managerial responsibilities or by a person referred to in point (a), (b) or (c), which is directly or indirectly controlled by such a person, which is set up for the benefit of such a person, or the economic interests of which are substantially equivalent to those of such a person;" (MAR Article 3(1.26))

In short, any person closely associated with a PDMR may be intentionally or unintentionally witness to inside information. Due to this, certain procedures must be followed to prevent market abuse.

3. Persons Discharging Managerial Responsibilites notifications

Per MAR Article 19, PDMRs and PCAs must notify regulatory bodies and the issuer if they are undertaking personal transactions with the issuer’s financial instruments. To ensure compliance, the issuer must release this information publicly within three working days.

This PDMR reporting rule applies only if the total sum of PDMR transactions exceeds the threshold predefined by the national regulator. By default, this threshold is 5000 EUR per calendar year but can be raised to 20000 EUR as it has been in Spain, for example. You can see a list of the countries that have altered their PDMR reporting threshold here

MAR Article 19 requires that PDMRs and PCAs notify their local financial authority when dealing with any of the issuer’s financial instruments that have requested to trade or have been approved to trade on EU trading markets; or is linked to other financial instruments that meet the MAR guidelines.

Moreover, Persons Discharging Managerial Responsibilities and Persons Closely Associated within emission allowance market participants (EAMPs) must notify regulatory authorities if they are involved in relevant auctions of certain emission allowances and auction products or their related derivatives. 

Again, financial authorities must only be notified if annual managers’ transactions exceed the member state’s PDMR reporting threshold.

Notifications of auctions must also be submitted within three business days.

If the financial instruments in question are outside of this purview, they need not be declared to local regulatory bodies.

Under MAR, issuers must notify regulatory authorities of all PDMR transactions that adhere to the following criteria:

"(a) the pledging or lending of financial instruments by or on behalf of a person discharging managerial responsibilities or a person closely associated with such a person, as referred to in paragraph 1; 

(b) transactions undertaken by persons professionally arranging or executing transactions or by another person on behalf of a person discharging managerial responsibilities or a person closely associated with such a person, as referred to in paragraph 1, including where discretion is exercised; 

(c) transactions made under a life insurance policy, defined in accordance with Directive 2009/138/EC of the European Parliament and of the Council (1), where: 

(i) the policyholder is a person discharging managerial responsibilities or a person closely associated with such a person, as referred to in paragraph 1, 12.6.2014 Official Journal of the European Union L 173/39 EN ( 1) Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1). 

(ii) the investment risk is borne by the policyholder, and 

(iii) the policyholder has the power or discretion to make investment decisions regarding specific instruments in that life insurance policy or to execute transactions regarding specific instruments for that life insurance policy." (MAR Article 3(19.7))

Concerning the transactions that do not need to be reported, MAR states that

"a pledge, or a similar security interest, of financial instruments in connection with the depositing of the financial instruments in a custody account does not need to be notified, unless and until such time that such pledge or other security interest is designated to secure a specific credit facility." (MAR Article 3(19.7))

4. PDMR notification form 

To comply with the Market Abuse Regulation, Persons Discharging Managerial Responsibilities must notify regulatory bodies if the above circumstances occur. 

Notifications must be presented as an official PDMR notification form, as outlined in the MAR PDMR notification section:

“A notification of transactions referred to in paragraph 1 shall contain the following information: 

(a) the name of the person; 

(b) the reason for the notification; 

(c) the name of the relevant issuer or emission allowance market participant; 

(d) a description and the identifier of the financial instrument; 

(e) the nature of the transaction(s) (e.g. acquisition or disposal), indicating whether it is linked to the exercise of share option programmes or to the specific examples set out in paragraph 7; 

(f) the date and place of the transaction(s); and 

(g) the price and volume of the transaction(s). In the case of a pledge whose terms provide for its value to change, this should be disclosed together with its value at the date of the pledge.” (MAR Article 3(19.6))

In most member states this is done through the national regulator’s online portal. In case you need to create and fill in your own PDMR notification form, here’s what it should look like: G4S PDMR Notification.

5. Closed period

As outlined in the Market Abuse Regulation, a Person Discharging Managerial Responsibilities is not allowed to conduct any personal or third-party transactions (directly or indirectly) with the issuer’s financial instruments during closed periods. 

The closed period MAR regulates refers to the time before mandatory public reports are released.

A closed period is a 30 calendar day duration that precedes an issuer’s obligatory public announcement of an interim financial report or year-end report. 

There are exceptions to this rule. Issuers may grant PDMRs the capacity to fulfill personal transactions of this nature in two scenarios:

“(a) on a case-by-case basis due to the existence of exceptional circumstances, such as severe financial difficulty, which require the immediate sale of shares; or 

(b) due to the characteristics of the trading involved for transactions made under, or related to, an employee share or saving scheme, qualification or entitlement of shares, or transactions where the beneficial interest in the relevant security does not change.” (MAR Article 3(19.12))

It is important to remember that the Commission can overrule decisions on exceptions. According to MAR:

The Commission shall be empowered to adopt delegated acts in accordance with Article 35 specifying the circumstances under which trading during a closed period may be permitted by the issuer, as referred to in paragraph 12, including the circumstances that would be considered as exceptional and the types of transaction that would justify the permission for trading.” (MAR Article 3(19.13))

6. Sanctions 

MAR imposes market abuse penalties on parties that fail to adhere to the stringent measures laid out for PDMRs and PCAs.

As outlined in MAR, sanctions for non-compliance can include:

“(a) an order requiring the person responsible for the infringement to cease the conduct and to desist from a repetition of that conduct; 

(b) the disgorgement of the profits gained or losses avoided due to the infringement insofar as they can be determined; 

(c) a public warning which indicates the person responsible for the infringement and the nature of the infringement; 

(d) withdrawal or suspension of the authorisation of an investment firm; 

(e) a temporary ban of a person discharging managerial responsibilities within an investment firm or any other natural person, who is held responsible for the infringement, from exercising management functions in investment firms; 

(f) in the event of repeated infringements of Article 14 or 15, a permanent ban of any person discharging managerial responsibilities within an investment firm or any other natural person who is held responsible for the infringement, from exercising management functions in investment firms; 

(g) a temporary ban of a person discharging managerial responsibilities within an investment firm or another natural person who is held responsible for the infringement, from dealing on own account; 

(h) maximum administrative pecuniary sanctions of at least three times the amount of the profits gained or losses avoided because of the infringement, where those can be determined;” (MAR Article 30(2))

Failure to comply can also result in financial repercussions. Administrative pecuniary sanctions for MAR infractions are outlined in the table below:

  MAR Article Infringement Maximum Administrative Pecuniary Sanctions
For a natural person 19 Up to €500,000 in fines
For legal persons 19 Up to €1,000,000 in fines


PDMR Sanctions Example 

Recently, the ex-managing director of a large international shipping firm was sanctioned under MAR for failing to comply with PDMR notification requirements.

The MD sold shares without informing the relevant authorities or the issuer. The director’s dealings breached MAR Article 19 due to the failure to comply with MAR guidelines on PDMR reporting. 

This resulted in the PDMR receiving a fine of more than $93,000.

7. Conclusion

Non-compliance with PDMR regulations can result in extremely harsh consequences. Make sure you know the rules if you are an issuer or PDMR dealing with transactions that meet the above PDMR guidelines.

To ensure MAR compliance, all you need to do is follow the notification guidelines specified in the regulation. Make sure notification data is correct and that notifications are submitted on time.

Speed Up PDMR Transaction Reporting

InsiderLog helps 500+ listed companies and professional advisors

  • Draw up MAR compliant PDMR lists
  • Automatically notify PDMRs of their legal obligations 
  • Quickly enter the details of closely related legal/physical persons
  • Automatically notify PDMRs at the beginning of the closed period

8. References & Further Reading


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