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  • Gemma Morgan, Howells Associates Legal Director

FCA’s first enforcement action under Article 19(1) MAR

PDMR at Braemar Shipping Services plc (Braemar) receives £45,000 penalty.

Article 19(1) of MAR requires persons discharging managerial responsibilities (PDMRs) within an issuer and persons closely associated with them (PCAs) to notify the issuer and the FCA of transactions conducted on their own account in the issuer's shares or debt instruments, or in derivatives or other financial instruments relating to those shares or debt instruments.

The MAR definition of PDMR is a natural or legal person in an issuer who is either of the following:

  • A member of the administrative, management or supervisory body of that entity (Article 3(1)(13), MAR).

  • A senior executive who is not a member of the administrative, management or supervisory body of that entity, but who has regular access to inside information relating directly or indirectly to that entity and the power to make managerial decisions affecting the future developments and business prospects of that entity (Article 3(1)(25), MAR).

On the occasion of three separate trades, the PDMR in question breached Article 19(1) of MAR by failing to notify Braemar and the FCA of transactions. As a result, Braemar was not in a position to announce the necessary PDMR notifications to the market in accordance with Article 19(3) of MAR. The PDMR also failed to seek prior authorisation from Braemar to trade, as required by Braemar’s internal policies, which resulted in Braemar not being given the opportunity to approve or reject his personal account dealings.

Paragraph 6 of the final notice sets out in full the manner of determination of the penalty but it is interesting to note that the level of penalty relates not only to the relative seriousness of the breaches but also to the PDMR’s salary (the breaches of MAR being regarded by the FCA as related to his employment). Allowance was made including for the fact that, although a pack of documents explaining PDMR responsibilities had been received, no individual training on MAR and responsibilities as a PDMR had been received.