The European Securities and Market Authority has published its final guidelines on the steps and the records that a person receiving a market sounding will have to consider and implement according to Article 11(11) of the Market Abuse Regulation (EU) No 596/2014 (MAR).

A market sounding is the disclosure of information to one or more potential investors, prior to an announcement, in order to gauge their interest in a possible transaction.

The guidelines detail:

• the factors that recipients of market soundings are to take into account when information is disclosed to them in order for them to assess whether the information amounts to inside information;

• the steps that such persons are to take if inside information has been disclosed to them; and

• the records that such persons are to maintain in order to demonstrate that they have complied with MAR.

The guidelines are strong on the need for training and compliance with pre-established reporting procedures yet also emphasise the need for these to be appropriate and proportionate to the recipients’ scale, size and nature of their business activity.

Records will need to be kept in a durable medium for at least 5 years.

The guidelines apply from 20 December 2016.