The Market Abuse Regulation (MAR) has introduced strict requirements for financial institutions and listed companies to ensure transparency and prevent market abuse. One of the key aspects of MAR is the management of market soundings and wall-crossing processes. In this post, we will explore these processes, best practices for compliance, and how Logwise’s platform can help simplify the process.
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Understanding Market Sounding and Wall-Crossing under MAR
A market sounding refers to the communication of information to potential investors before the announcement of a transaction, in order to gauge their interest and assess the potential demand for the securities. Wall-crossing, on the other hand, is the process of sharing confidential or inside information with select individuals, who are then considered “wall-crossed” and subject to specific restrictions and obligations under MAR.
Both market sounding and wall-crossing are essential components of the financial industry, particularly in investment banking. However, they also pose significant risks if not managed properly, as they can lead to the unlawful disclosure of inside information and potential market manipulation.
Best Practices for Market Sounding and Wall-Crossing Compliance
- Establish clear policies and procedures:
Develop comprehensive policies and procedures for managing market sounding and wall-crossing processes, including guidelines for identifying inside information, determining when to initiate these processes and documenting all relevant communications.
- Train employees on MAR requirements:
Ensure that all employees involved in market sounding and wall-crossing processes are well-trained on MAR requirements and understand both their own obligations and those of the investors they wall-cross.
- Maintain accurate and up-to-date records:
Keep detailed records of all market sounding and wall-crossing activities, including the individuals involved, the information shared, and investor responses. These records should be easily accessible and stored securely, for at least five years as required by MAR.
- Implement robust controls and monitoring:
Implement controls to prevent unauthorised access to inside information and ensure investors are only wall-crossed following the strict procedures defined in MAR.
- Regularly review and update policies and procedures:
Periodically review and update your market sounding and wall-crossing policies and procedures to ensure they remain effective and compliant with evolving regulatory requirements.
Simplify Market Sounding/Wall-Cross with Logwise
Logwise offers a comprehensive platform designed to streamline the management of market sounding and wall-crossing processes, easing compliance with MAR and improving operational efficiency. Some of the key features of Logwise’s platform include:
Automated market sounding and wall-crossing workflows:
– Logwise’s platform guides users through the entire market sounding and wall-crossing process, automating many of the tasks involved and reducing the risk of human error. This includes, amongst other steps, automatic wall crossing requests, distribution of transaction details and cleansing messages pre-fill with your data (and the option to edit).
Secure and centralised data storage:
– Logwise provides a secure, cloud-based platform for storing all market sounding and wall-crossing data, ensuring that it is easily accessible and protected from unauthorised access. Your data is secured with multiple levels of encryption, secure authentication and disaster recovery mechanisms in addition to state of the art threat detection and physical security.
– Logwise’s platform offers continuous monitoring of market sounding and wall-crossing activities by compliance officers, allowing compliance teams to quickly identify potential issues and take corrective action.
– Logwise’s platform provides instant data exports for you to respond to requests from regulatory authorities regarding any market soundings performed by your organisation.
Expert support and guidance:
– Logwise offers expert support and guidance on MAR compliance, helping users navigate the complex regulatory landscape and stay up-to-date with the latest requirements.
Market sounding and wall-crossing are critical aspects of the financial industry, but they also pose significant risks if not managed properly. By implementing best practices for compliance and leveraging the power of Logwise’s platform, financial institutions and listed companies can effectively manage and ensure the integrity of their market sounding and wall-crossing processes, ensuring compliance with MAR and improving overall operational efficiency.
Learn how to simplify your market sounding and wall-crossing processes – book your demo today!