MAR 2.6 Management of stabilisation

MAR 2.6.1 G 01/12/2001

The purpose of this section and of section 2.7 is to provide an orderly structure for the management of stabilising action even where it is to be carried out on a devolved basis, whether in the United Kingdom or elsewhere. The central management has to be in the hands of one stabilising manager. If authorised in the United Kingdom, the stabilising manager has to set up, operate and be legally responsible for a single stabilisation register MAR 2.7.2 R) which must be kept in the United Kingdom or be capable of being inspected by the relevant regulators. These sections accordingly build on the base requirement for authorised persons at MAR 2.3.2 R (3)

MAR 2.6.2 R 01/12/2001

(1)
This section, and section MAR 2.7, apply only where the stabilising manager is a firm or is employed by a firm.
(2)
Where the stabilising manager is employed by a firm, this section and MAR 2.7 shall have effect as if the obligations imposed on the stabilising manager were imposed on the firm.

MAR 2.6.3 R 01/12/2001

No bid may be made or transaction effected in the course of stabilising action unless the stabilising manager:

(1)
has established the relevant register in compliance with MAR 2.7.2 R; and
(2)
is in compliance with the registration requirements in MAR 2.7.2 R in respect of all earlier transactions effected in the course of stabilising action in connection with the offer in question.

MAR 2.6.4 R 01/12/2001

No bid may be made or transaction effected in the course of stabilising action except by:

(1)
the stabilising manager himself; or
(2)
a person appointed by the stabilising manager to act as his agent on terms which:
1. (a)
  make the agent responsible to the stabilising manager; and
2. (b)
  make the stabilising manager as responsible to others for the acts or omissions of the agent as if they had been done or omitted by the stabilising manager.

MAR 2.6.5 R 01/01/2003

(1)
The stabilising manager may not during the stabilising period enter into a transaction as principal in relevant securities or associated securities with any agent of his appointed under MAR 2.6.4 R.
(2)
Paragraph (1) does not apply if, at the time of the transaction, neither the stabilising manager nor the agent knew or could reasonably have been expected to know the identity of his counterparty.
(3)
Paragraph (1) does not apply where:
1. (a)
  the transaction between the stabilising manager and his agent is undertaken solely for the purpose of re-allocating the economic risk of positions that were taken by the stabilising manager and his agent in the course of stabilising action and is priced accordingly; and
2. (b)
  the relevant securities are, and the transactions are in, investments that:
  1. (i)
    fall within article 77 or 78 of the Regulated Activities Order (bonds, etc), or article 79 (instruments, etc) or 80 (certificates, etc) which confer rights only in respect of investments falling within article 77 or 78 ; and
  2. (ii)
    are not exchangeable for or convertible into, and do not give rights to acquire, dispose or subscribe for, investments falling within article 76 of the Regulated Activities Order (shares, etc), or articles 79 or 80 which confer rights in respect of investments falling within article 76.1

MAR 2.6.6 G 01/01/2003

MAR 2.6.5 R prohibits transactions between a stabilising manager and his agent unless it is not reasonable to expect both the principal and agent to know the identity of their counterparty or where MAR 2.6.5 R (3) applies. MAR 2.6.5 R (3) is designed to permit a transaction between a stabilising manager and his agent that takes place in the debt markets, typically at the end of the business day or stabilising period, that "squares up" positions taken in the course of stabilising action. The reference to price in MAR 2.6.5 R (3)(a) reflects the need to be mindful that although the transaction may in practice, for example, be effected at a price that is the average of the constituent transactions, so not the prevailing market price, the purpose behind the transaction is to re-allocate economic risk established in the course of stabilising action and is not to mislead the market. MAR 2.6.5 R (3)(b) has been drafted to ensure that the prohibition in MAR 2.6.5 R (1) remains applicable to the issue of and transactions in any investment that provides a right to acquire or subscribe for, or may eventually be converted or exchanged into, a share.1

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MAR 2.6 Management of stabilisation