Listing Act – Simplification of directors' dealings: BaFin raises threshold for notifications of transactions

Update Compliance 16/2025, Update Capital Market Law No. 59

One year after the EU Listing Act came into force, BaFin is taking a further step towards deregulating capital markets law. In its general decree of December 4, 2025, the German Federal Financial Supervisory Authority (BaFin) raised the threshold for notifications of managers' transactions (so-called directors' dealings) from EUR 20,000 to EUR 50,000 per calendar year. The decree will come into force on January 1, 2026. With this step, BaFin aims to ease the burden on the managers concerned and the respective issuers. At the same time, the aim is to strike an appropriate balance between transparency and the number of notifications.

Own Account Transactions by managers and new regulation under the EU Listing Act

According to Art. 19 (1) MAR, persons discharging managerial responsibilities at an issuer shall report personal transactions involving shares or debt securities of that issuer, related derivatives, or other related financial instruments. This applies to managers of issuers who have applied for the admission or inclusion of their financial instruments to trading on a regulated market in the EU, a multilateral or organized trading facility in the EU (trading venue) or have participated in such an application. Managers subject to these reporting requirements are members of an administrative, management, or supervisory body of the issuer or senior managers with regular access to inside information relating to the issuer who are authorized to make strategic business decisions. In the case of stock corporations under German law, these are typically members of the management board or supervisory board. In addition, persons closely associated with a manager are also subject to reporting duties. This includes close relatives, but also legal entities in which the issuer's manager discharges managerial responsibilities, which are controlled by the manager, or whose economic interests largely correspond to those of the manager. The notification of a transaction must be made to the issuer and to BaFin. The issuer shall make public the notification so that the capital markets can take note of the transaction. This is because the regulator assumes that such personal transactions by managers can send a signal relevant for capital market participants.

Until now, the reporting requirement in Germany applied to transactions that were carried out after a total volume of EUR 20,000.00 had been reached within a calendar year. The increase in the reporting threshold, which will take effect on January 1, 2026, became possible as a result of the EU Listing Act, which provides for more flexible notification thresholds for directors' dealings in the EU member states. In addition to the reporting threshold of EUR 20,000.00 per year as provided for in the MAR, the respective competent national authority, in Germany BaFin, was authorised to raise the threshold to EUR 50,000 at its own discretion. BaFin has now made use of this option.

By raising the threshold, BaFin intends to strike an appropriate balance between the degree of transparency and the number of notifications, taking market conditions into account. Based on the reporting data for the years 2021 to 2024, this would result in fewer notifications of up to a third. However, large and significant parts of personal trading will remain captured by the notification requirement and will be made transparent to the market. The increase of the threshold is also intended to take into account the high organizational and financial costs incurred by the persons obliged to make a notification and by the issuers as a result of the notification and disclosure requirements, especially for small and medium-sized enterprises.

Prohibition of Dealing During Closed Periods Remains Unchanged

However, the prohibition to trade during so-called closed periods remains unchanged. Thereunder, persons discharging managerial responsibilities at an issuer may not engage in personal transactions or transactions for third parties in connection with the issuer's shares or debt instruments or with derivatives or other related financial instruments in the 30 days prior to the publication of interim or annual (financial) reports. This is intended to prevent insider dealing and ensure fair markets. According to the wording of MAR, this does not explicitly apply to persons closely associated with a manager. However, transactions involving or on behalf of closely associated persons may be captured by the prohibition to trade as indirect personal transactions or transactions for third parties. However, the prohibition does not apply to transactions prior to the publication of quarterly reports. This is because these reports are not considered interim reports within the meaning of the prohibition as set forth in MAR. Nevertheless, the general prohibition of insider dealing must be observed in these cases as well.

Prohibition of insider dealing and of unlawful disclosure of inside information

The prohibitions in Art. 14 MAR, i. e., the prohibition on insider dealing, recommending insider dealing, and the unlawful disclosure of inside information, continue to apply unchanged. Insider dealing pursuant to Art. 8 MAR is generally prohibited. This means that a person possessing inside information (insider) may not use this information to acquire or sell financial instruments, either directly or indirectly, for its own account or for the account of a third party. In addition, it is also prohibited to recommend that another person engages in insider dealing or to induce another person to engage in insider dealing. Cancelling or amending an order concerning a financial instrument using inside information also constitutes prohibited insider dealing. The unlawful disclosure of inside information is also prohibited. The prohibition of insider dealing and its preliminary acts is intended to strengthen confidence in the financial markets, lead to equal distribution of information among market participants, and thus ensure fair trading. The most part of the provisions on insider dealing are to be found in MAR. The German Securities Trading Act (WpHG) only contains provisions that supplement MAR and primarily deal with the criminal, administrative, and civil law consequences (see below).

Ad hoc disclosure and changes introduced by the Listing Act

The Listing Act amends the rules on ad hoc disclosure with effect from June 5, 2026. The basic principle remains unchanged: an issuer of financial instruments listed on a trading venue in the EU shall inform the public as soon as possible of inside information which directly concern that issuer. This principle is meant to limit the risk of insider dealing by ensuring a high degree of transparency regarding price-sensitive information. As the provisions on managers’ transactions, the ad hoc disclosure requirement also applies to issuers involved in initiating the listing of their financial instruments on a trading venue. The upcoming change concerns so-called "protracted processes." These are situations that consist of several intermediate steps until a final event occurs. Examples include M&A transactions, capital measures, or restructurings. In the future, intermediate steps that constitute inside information will no longer have to be published via an ad hoc announcement. This will only be required for the final event of the protracted process. The issuer will no longer be required to adopt a formal and documented resolution to defer the publication of an ad hoc announcement. To facilitate the distinction between intermediate steps and final events, the EU Commission has been empowered to adopt a delegated act. This is intended to specify, for certain protracted processes, when the final event is deemed to have occurred and must therefore be disclosed. ESMA already published a related proposal on May 7, 2025. The delegated act is expected to be adopted in 2025.

However, the issuer may only refrain from publishing an intermediate step if it ensures its confidentiality. Otherwise, it must publish it as soon as possible. This is the case if a rumour explicitly relates to undisclosed inside information (i. e. the intermediate step) and that rumour is sufficiently precise. In this case, it is assumed that confidentiality is no longer ensured. Issuers therefore have to monitor the information available on the market in order to identify and evaluate rumours. They must still be prepared to publish an ad hoc announcement about an interim step at short notice and have an up-to-date "shadow ad hoc announcement" ready for this purpose.

Insider dealing prohibitions and essential organisational requirements still apply

Irrespective of disclosure requirements being facilitated, essential organisational obligations still apply. If an interim step constitutes inside information, the related prohibitions have to be observed, in particular those relating to insider dealing and the unlawful disclosure of inside information. Issuers must also continue drawing up an insider lists.

Sanctions for violations

Violations of the prohibition of insider dealing, disclosure and notification requirements may result in fines and criminal penalties. A failure to make ad hoc announcements, late or incorrect ad hoc announcements, or directors' dealings are subject to fines. They may also be sanctioned as information-based market manipulation and, in the case of intent and influence on the market price of the financial instrument concerned, even punished with fines or imprisonment. Violations of insider dealing prohibitions are also subject to fines and, if intentional, even criminal penalties. The sanctions for violations of issuer obligations are primarily directed against the responsible managers; for the purposes of criminal prosecution, the disclosure hoc and other issuer obligations are "passed on" to them (Section 14 German Criminal Code (StGB), Section 9 Administrative Offenses Act (OWiG)). Findings of criminal market abuse in the form of prohibited insider dealing or market manipulation by executives can also result in corporate fines. These can amount to up to EUR 15 million or 15 % of the previous year's turnover of the company concerned.

Practical note

The reform of European market abuse law through the Listing Act is progressing. The raising of the threshold for reporting personam transactions by persons discharging managerial responsibilities by BaFin and the extension of exemptions from the trading ban during so-called closed periods will make things much easier. However, this should not obscure the fact that insider law continues to impose a number of behavioural and organizational obligations on issuers and their executives. Strict compliance with these obligations is essential, as the penalties for violations remain significant.

Issuers and executives must adapt their internal guidelines in line with the new requirements and align their monitoring accordingly. In the event of official investigations into suspected omissions or false reports – in the case of suspected administrative offenses by BaFin or suspected criminal offenses by the local public prosecutor's office – internal codes of conduct should generally be established, particularly for the event of searches.

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