Proprietary transactions by executives
Securities transactions carried out by executives with the securities of their own company are referred to as proprietary transactions by executives (also called management transactions in Switzerland ) . Due to the potential connection with the largely prohibited insider trading , such transactions are monitored particularly closely by the supervisory authorities. In the European Union , the Market Abuse Regulation , which has been in force since mid-2014, regulates extensive reporting obligations in Section 19 MMVO.
History and current status
Switzerland
In Switzerland , the term management transaction is used for proprietary transactions by executives. The legal basis for transactions by members of the management of listed stock corporations with their own company's securities is Art. 56 of the listing regulations of the SIX Swiss Exchange. The purpose of the regulation is to increase market integrity by disclosing the characteristics of company insiders and treating investors equally.
In principle, only the members of the board of directors and the management are subject to the reporting obligation. They report their investment-related securities transactions to the issuer within two days, who in turn is obliged to report to the stock exchange (SIX Group | SIX) within two days. The exchange publishes the reports received promptly on its website, where they are available to everyone for a year. Transactions with a volume of less than CHF 100,000 within a month, as well as securities allotments based on employment contracts, are not published.
European Union
With the entry into force of the EU-wide Market Abuse Regulation (MMVO) on July 2, 2014, the different national regulations were replaced by a uniform specification in the European Union .
Great Britain
In Great Britain , the first rules on proprietary business by executives come from general company law. The corresponding regulations in Sections 324–329 of the Companies Act 1985 were based on recommendations made in 1945.
The provisions of the Companies Act 1985 on proprietary business by executives have been repealed by the Companies Act 2006 as part of the implementation of the European Market Abuse Directive (MM-RL) 2003/06 / EC and its implementing directive 2004/72 / EC . Now such transactions in Great Britain are regulated under capital market law by Section 96A Financial Services and Markets Act 2000 (FSMA) and the Disclosure Rules and Transparency Rules (DTR) of the Financial Services Authority (FSA) based on it. This is flanked by a model code, which can be found in Appendix 1 to Listing Rules (LR) 9 of the FSA, and which companies must comply with according to LR 9.2.8 (R).
Germany
Section 15a of the Securities Trading Act (2002-2014)
introduction
In Germany, it was not until Section 15a of the Securities Trading Act (WpHG), which was introduced on July 1, 2002 by the Fourth Financial Market Promotion Act, that a statutory reporting requirement for proprietary transactions by executives was established. The purpose of the standard section 15a WpHG was the main goals of capital market integrity, informed transaction decisions by investors, equal treatment of investors and capital market transparency.
The German legislature had anticipated by introducing its obligation to regulate, which was justified by the Market Abuse Directive and the Implementing Directive 2004/72 / EC. However, this also meant that Section 15a of the WpHG had to be comprehensively reformed on October 28, 2004 by the Investor Protection Improvement Act in order to meet European requirements. But this new regulation also raised many questions of doubt both in the factual and personal scope of Section 15a WpHG, as well as in the interpretation of the individual elements of the facts. The legislature therefore felt compelled to make new changes to Section 15a of the WpHG as early as July 19, 2005 through the new regulation of Pfandbrief law. The last significant changes were made to Section 15a WpHG on January 20, 2007 through the implementation of the Transparency Directive 2004/109 / EC by the Transparency Directive Implementation Act (TUG). The legislature had completely redrafted the obligation to publish under section 15a (4) of the WpHG, decoupled it from the status of reporting under section 15a (1) of the WpHG and introduced an obligation to report to the company register. With the last amendment to Section 15a WpHG by the Financial Market Directive Implementation Act of July 16, 2007, it was only made clear that only issuers with a corresponding domestic connection must report proprietary transactions by executives to the Federal Financial Supervisory Authority (BaFin).
Material scope
The group of issuers covered by the scope of Section 15a (1) of the WpHG was restricted on the one hand by the group of recorded markets and on the other hand by the securities recorded that are traded on these markets.
According to section 15a (1) sentence 3 no. 1 WpHG, it was necessary for the issuer's shares to be admitted to trading on a domestic stock exchange . The requirement for admission to the stock exchange in Germany was supplemented by Section 15a (1) sentence 3 no. 2 WpHG. According to this, issuers were also recorded whose securities are admitted to trading on an organized market in another member state of the European Union or another signatory to the Agreement on the European Economic Area .
Transactions with shares of the issuer or related financial instruments , in particular derivatives , were generally recorded by section 15a (1) sentence 1 of the WpHG . Therefore were convertible bonds , convertible bonds , warrants , purchase and sale options , looking for cash payment options , bonds with warrants , phantom stock , stock appreciation rights , option rights without bond , convertible bonds , investment certificates , participation certificates and all transactions on shares of § 15a sentence. 1 1 WpHG, as all of these can be classified as financial instruments within the meaning of Section 2 (2b) WpHG.
Section 15a (1) sentence 1 of the WpHG is based on the fact that the person recorded is “own business”. This is based on the contract under the law of obligations as the trigger for the notification obligation pursuant to Section 15a (1) sentence 1 WpHG. The subsequent real transaction was basically not subject to the reporting obligation again. An exception could only be assumed if the transaction in rem triggered an indicator effect for the market again.
Active or passive, paid or unpaid, unilateral or bilateral transactions were included without distinction from the element “transactions” in section 15a (1) sentence 1 WpHG. For this reason, donations , pledges , assignments by way of security and the granting of shares or options on the basis of an employment contract or as part of the remuneration had to be reported.
Personal scope
§ 15a para. 2 var. 2–4 WpHG included members of a management , administrative or supervisory body of the issuer in the scope of Section 15a WpHG. According to § 15a Abs. 2 Var. 5 WpHG also included other persons who have regular access to insider information and who are authorized to make significant business decisions. In addition to the formal connection point of the position of the executive body, there was also a connection point that was based on the actual circumstances at the issuer.
As a result of the reform of Section 15a WpHG within the framework of the AnSVG, points of contact that existed in Section 15a WpHG were removed, so that from this point onwards no executives of affiliated companies were recorded, let alone a group-wide scope of application of Section 15a WpHG.
According to § 15a Paragraph 1 Clause 2 i V. m. Paragraph 3 sentence 1 of the WpHG were also covered by the notification obligation. These are spouses, registered partners, dependent children and other relatives who have been living in the same household with the manager within the meaning of Section 15a (2) WpHG for at least one year at the time the reportable transaction is concluded.
According to section 15a (3) sentence 2 of the WpHG, legal persons in which persons with managerial tasks of the issuer or their close relatives perform managerial tasks also fall under the reporting obligation of section 15a of the WpHG. Section 15a (3) sentence 3 of the WpHG also extends this obligation to legal persons, companies and institutions that are directly or indirectly controlled by a person with managerial tasks of the issuer or their close relatives who were founded for the benefit of such a person or whose economic interests are largely correspond to those of such a person.
Reporting and publication obligations
In Germany, executives reported their own transactions to the market in a two-step process. First of all, the issuer and BaFin were notified. According to Section 15a (4) WpHG, only domestic issuers then had to publish the notification. The concept of domestic issuer is legally defined in Section 2 (7) of the WpHG.
Persons covered by section 15a of the WpHG had to report proprietary transactions to both the issuer and BaFin within a five-day period in accordance with section 15a (1) sentence 1 of the WpHG . The content of the reporting obligation results from Section 10 WpAIV.
After the domestic issuer had received the notification, it had to publish it immediately and report it to the company register in accordance with Section 15a (4) WpHG . The precise structure of this obligation resulted from Section 15a (4) sentence 1 WpHG in conjunction with V. m. § 13 WpAIV and the general provisions of §§ 3a, 3b WpAIV. At the same time as the publication, the domestic issuer had, pursuant to Section 15a (4) sentence 1 WpHG i. V. m. §§ 13a, 3c WpAIV to notify the BaFin of the publication .
By section 15a (5) sentence 1 WpHG i. V. m. 13 WpAIV, BaFin was expressly granted the authority to publish additional information on the Internet at its address. BaFin has made use of this option for several years and has set up a database that can be accessed on its homepage, in which notifications according to Section 15a of the WpHG that were not dated back more than a year can be researched.
Violations of the obligations of Section 15a WpHG
The deliberate or reckless violation of the notification obligation under Section 15a (1) of the WpHG, the publication requirement under Section 15a (4) of the WpHG, or failure to submit it in good time constituted an administrative offense under Section 39 (2) No. 2d, No. 5b, No. 6 WpHG According to Section 39 (4) WpHG, BaFin can impose a fine of up to € 100,000 for such violations .
The legislature did not specifically regulate the question of civil law claims for damages in section 15a WpHG as in sections 37b, 37c WpHG for section 15 WpHG. For this reason, Section 15a of the WpHG was not generally viewed as a protective law within the meaning of Section 823 (2) BGB. Apart from extreme exceptional cases, which can be recorded in Section 826 of the German Civil Code, there was generally no civil liability in the event of a violation of Section 15a of the WpHG.
Market Abuse Regulation (from 2014)
With the entry into force of the EU-wide Market Abuse Regulation (MMVO) in 2014, Section 15a of the WpHG was abolished.
United States
In the USA , directors' dealings or director deals have been subject to legal regulations for decades. These have their origin in capital market law with the Securities Act of 1933 .
Section 16, which was introduced with the Securities Exchange Act of 1934, was last significantly reformed by Section 403 of the Sarbanes-Oxley Act 2002. In doing so, the importance of the reporting requirements of Section 16 (a) has been strengthened compared to the profit distribution obligation of Section 16 (b).
literature
- Falk Osterloh: Directors' Dealings - § 15a WpHG in comparison with the regulations in the United States of America, Great Britain and the European Market Abuse Directive with special consideration of the personal scope . Duncker & Humblot , Berlin 2007, ISBN 978-3-428-12512-8 .
- Albert M. Riedl: Transparency and investor protection on the German capital market - an empirical analysis using the example of reportable securities transactions according to § 15a WpHG (Directors' Dealings) . GRIN Verlag , Munich 2009, ISBN 978-3-640-43154-0 .
- Michael Rau: Directors' Dealings on the German stock market: empirical analysis of reportable securities transactions . Gabler Edition Wissenschaft , Wiesbaden 2004, ISBN 3-8244-8217-7 .
Web links
- bafin.de:
- Robert and Patrick Hable (2005): Insiders have a good feel for the development of stock prices
Individual evidence
- ↑ Directive on the disclosure of management transactions. (PDF; 36 kB) In: SIX. November 12, 2010, accessed January 17, 2019 .
