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MAR 2.1 Application

APPLICATION: WHO?

MAR 2.1.1R
  1. (1)

    This chapter applies to every firm.

  2. (2)

    For the purposes of section 118(8) of the Act, behaviour (whether by a firm or not) conforming with the price stabilising rules does not amount to market abuse.

MAR 2.1.2G
  1. (1)

    This chapter is available to any person, whether that person is a firm or not, who wishes to show:

    1. (a)

      that he acted in conformity with the price stabilising rules for the purposes of paragraph 5(1) of Schedule 1 to the Criminal Justice Act 1993 (Insider dealing); or

    2. (b)

      that he acted or engaged in conduct in conformity with the price stabilising rules for the purposes of section 397(4) or (5)(b) of the Act (Misleading statements and practices); or

    3. (c)

      that his behaviour conforms with rules in accordance with section 118(8) of the Act (market abuse).

  2. (2)

    Any person concerned with an offer for cash of securities might wish to rely on this chapter; there are no legal restrictions on the appointment of stabilising managers to whom this chapter may apply. However, the main focus of the chapter is on lead managers when they are contemplating or carrying out an offer for cash of securities. Agents appointed by lead managers, on the basis contemplated by this chapter, may also find the chapter especially relevant.

APPLICATION: WHAT?

MAR 2.1.3R

This chapter applies to an offer for cash, that is, an offer of securities:

  1. (1)

    where the securities are investments falling within paragraphs 76, 77, 78, 79 or 80 of the Regulated Activities Order;

  2. (2)

    where the offer for cash is to be, is, or has been, made at a specified price payable in sterling or another currency;

  3. (3)

    where those securities:

    1. (a)

      have been admitted to trading (or are the subject of an application for admission to trading) on an exchange or other institution included in MAR 2.1.5 G; or

    2. (b)

      are, or may be, traded under the rules of the International Securities Markets Association;

  4. (4)

    where the total cost of the securities subject to the offer at the offer price is at least £15,000,000 (or its equivalent in another currency); and

  5. (5)

    where the offer is public in character and is to be, is, or has been subject of a public announcement.

MAR 2.1.4G

The effect of MAR 2.1.3 R is to include both initial publicoffers and publicoffers of additional securities to rank alongside securities already in issue. An offer is likely to be regarded as public in character where it is made in a prospectus. Other offers that may be regarded as public are offers to a section of the public, placements that are not essentially private and distributions. But the use of the word "offer" and the fact that there has to be a public announcement of the offer shows that a sale, for example by means of a block trade, of securities already in issue is not included.

MAR 2.1.5G

Exchanges (see MAR 2.1.3 R (3))

Application : securities to admitted to trading on the following exchanges are within the scope of theprice stabilising rules (seeMAR 2.1.3 R (3)).

Arecognised investment exchange

A recognised overseas investment exchange

A regulated market

Other specific exchanges as listed inMAR 2 Annex 1

APPLICATION: WHERE?

MAR 2.1.6G

This chapter:

  1. (1)

    so far as it provides a defence for any person, has the same territorial application as the provision which is alleged to have been contravened; and

  2. (2)

    in its application to a firm for purposes other than those falling within (1), applies to the firm's business carried on from an establishment in the United Kingdom.

MAR 2.1.7G

There are specific provisions in MAR 2.8 about action for stabilising purposes in conformity with provisions made by certain overseas authorities. Accordingly action by persons not present in the United Kingdom, but where the action may have an effect in the United Kingdom, may have to be assessed in terms of the general provisions in this chapter, or the specific provisions in MAR 2.8.

MAR 2.1.8G

The defences to legal or regulatory procedures referred to in MAR 2.1.6 R (1) and listed at MAR 2.1.2 G (1) are conferred by rules made under section 144 of the Act (price stabilising rules); this means that MAR 2.6 (Management of stabilisation) and MAR 2.7 (Recording of action taken), which are made under section 138 of the Act, and apply only to authorised persons, are not relevant for the purposes of such a defence.

RIGHTS OF ACTION FOR DAMAGES

MAR 2.1.9R

A contravention of the rules in MAR 2 does not give rise to a right of action by a private person under section 150 of the Act (and each of those rules is specified under section 150(2) of the Act as a provision giving rise to no such right of action).