UNCOVERING MAR FOR BOND ISSUERS

Behind the fear: a lighter reality

Clearer rules for stronger markets for bond issuers

The Market Abuse Regulation (MAR)[1] , in force across the European Union since July 2016, was introduced to strengthen the integrity of European financial markets by establishing a harmonized legal framework to prevent market abuse. It repealed the earlier 2003 Market Abuse Directive (MAD)[2] , which had led to a fragmented implementation across Member States.

As a directly applicable regulation, MAR introduced a more consistent and comprehensive regime that supports deeper, more transparent, and integrated capital markets. It also reinforces investor protection and confidence across the European Union’s financial markets.

Despite these clear objectives, MAR is persistently perceived as a complex, heavy and burdensome compliance obligation. This perception, however, does not always reflect the reality, as these requirements are more manageable and narrower than commonly assumed in practice when it comes to bond issuers. As it is ultimately a question of understanding the rules, their implication and addressing them in a pragmatic and practical way, bond issuers need to seek the right MAR legal and operational advice.

Understanding MAR: key provisions

MAR prevents and/or regulates, among others, the following market manipulation and abusive practices:

• insider dealing[3]: the use of inside information[4]to execute, amend, or cancel transactions, or to encourage that others do so;
• unlawful disclosure of inside information[5]: the improper sharing of inside information with third parties who might use it for personal gain, without appropriate authorization;
• notifications of transactions by Persons Discharging Managerial Responsibilities (PDMRs)[6]; and
• market manipulation[7]: actions such as spreading false or misleading information or artificially inflating trading volumes or market prices to benefit specific parties.

MAR applies to financial instruments that are:

• admitted to trading on EU regulated markets, multilateral trading facilities (MTFs), or organised trading facilities (OTFs); or
• for which an admission to trading on a regulated market or MTF has been made.

MAR also applies to instruments whose price or value depends on, or has an effect on, the price or value of such listed financial instruments.

IMPACT ON MARKET ATTRACTIVENESS

When MAR was first introduced, many feared that its rules and requirements would deter issuers from EU markets due to compliance costs and burden. Nearly a decade later, experience has shown that MAR’s disclosure and compliance obligations for bonds issuers can be applied in a balanced and proportionate manner.

Luxembourg is, by its very nature, a debt-oriented market. Through the conjunction of an innovative and favourable legal and tax framework, debt issuances of all types have been frequently structured through Luxembourg and listed on one of the markets operated by the Luxembourg Stock Exchange (the LuxSE). The LuxSE which offers multiple listing options addressing both issuers and investors needs and customer-oriented approach has gained strong market recognition becoming a European leader in international bond listings. Furthermore, issuers benefit from EU rules that are directly applicable, clear European Securities and Markets Authority (ESMA) guidance, and pragmatic Commission de Surveillance du Secteur Financier (CSSF) supervision.

Quick Zoom on the LuxSE[7]

LuxSE is a prime example of how a well-regulated market can thrive globally. As the world’s leading platforms for international bond listings (hosting over 33% of all cross-border issuance) LuxSE illustrates how the EU’s regulatory framework, including MAR, provides the clarity and flexibility that issuers value.

LuxSE is also home to the Luxembourg Green Exchange (LGX), the world’s first platform dedicated to sustainable finance, featuring nearly €1 trillion in listed green, social and sustainable bonds. This leadership extends beyond traditional bonds. The success of LGX reflects how a well-calibrated regulatory environment can support innovation while maintaining market integrity.

MORE PROPORTIONATE IN PRACTICE

Companies seeking to raise capital typically rely on two primary methods: (i) equity financing, through the issuance of new shares, and (ii) debt financing, through loans or bonds issuances. Each approach carries distinct legal, financial and regulatory implications, particularly in terms of disclosure obligations, investor protection, and market conduct rules.

Although MAR formally applies to all securities (i.e., both equity and debt securities), its practical impact is less restrictive when it comes to bonds. Indeed, most high yield bonds are issued through private placements, targeting qualified or institutional investors such as banks, asset managers, or large companies. These professional investors have the expertise and resources to properly evaluate the risks involved, hence reducing the impact the MAR requirements may have. Accordingly, debt transactions generally involve fewer market-sensitive developments, lower price volatility and reduced speculative activity.

Consequently, MAR obligations, such as maintaining insider lists, monitoring inside information, and ensuring timely disclosure, are typically less demanding in the context of debt issuance.

For Luxembourg bond issuers, particularly high-yield issuers, MAR is less about heavy burdens and more about smart process management. With the rights tools, such as scope assessments, templates, and proportionate controls, compliance becomes a ‘light-touch’, repeatable part of the issuance of bond process rather than an obstacle.

INSIDE INFORMATION & DISCLOSURE OBLIGATIONS

From a practical perspective, particularly for bond issuers, handling and disclosing inside information is far more manageable than for equity issuers. Bond markets operate under different dynamics: events qualifying as inside information are less frequent, disclosure expectations are narrower, regulatory focus is calibrated to materiality rather than volume and price movements often result from publicly available macroeconomic factors.

In the bond markets, identifying inside information requires contextual judgment; what is considered ‘price-sensitive’ for a bond investor differs from what moves an equity price. Day-to-day business developments or quarterly earnings fluctuations rarely reach the threshold of inside information for debt instruments, since bond pricing typically reacts only to credit-sensitive events.

Bonds investors usually being institutionals, instruments are less liquid, and price sensitivity is lower. A covenant breach, rating downgrade, or payment default could qualify as inside information, but routine developments typically do not. Furthermore, disclosure delays are also easier to justify.

For example, shifts in interest rates or inflation expectations may affect bond pricing but do not constitute inside information. As a result, such changes do not always trigger immediate disclosure obligations, giving issuers greater discretion in managing the timing and content of announcements.

Examples of potential inside information for bond issuers include:

• a distressed debt restructuring or forbearance negotiation;
• a refinancing or liability management exercise under confidential preparation;
• a rating agency downgrade prior to public announcement;
• a default event (payment missed or covenant breach); or
• a material acquisition or disposal affecting leverage or covenant ratios.

INSIDERS’ LISTS

According to Article 18 of MAR, issuers or persons acting on their behalf are required to:

• draw up an insiders’ list identifying all persons with access to inside information;
• ensure the list is promptly updated when new insiders are added or when the nature of the inside information changes;
• retain the lists for at least five years; and
• ensure insiders acknowledge their legal and regulatory duties.

Many issuers tend to view insiders’ list obligations under MAR as a cumbersome administrative burden due to the regulation’s formalistic requirements. Indeed, the requirements of identifying precise insider categories, timestamps, and maintaining up-to-date contact details can give the impression of heavy compliance machinery, especially for issuers without dedicated compliance teams. However, when examined through a practical and proportionate lens, particularly in the context of bond issuers, maintaining insider lists is often far simpler and more controllable than initially expected.

While insiders’ list obligations are uniform across equity and debt issuers, their practical scope and frequency of use differ considerably in bond markets:

Fewer inside information events

As outlined above, bond issuers generally face fewer instances where information qualifies as “inside information” within the meaning of MAR. For example, a high yield bond issuer is less likely to experience market-moving events compared to an equity issuer, whose share price is continuously traded and highly sensitive to corporate announcements.

A narrower universe of insiders

As opposed to equity financings where large teams are involved including bankers, lawyers, auditors, and investor relations professionals (e.g. an IPO requires that hundreds of people access sensitive information, requiring frequent updates to the insiders’ list to comply with MAR), smaller, more focused teams are typically involved for bonds issuances. In practice, the individuals having access to inside information in a bond context is usually small and well-identified resulting in shorter, more stable insiders that are updated less frequently e.g.:

• senior management directly involved in the transaction;
• external legal counsel (issuer’s and underwriters’ lawyers); and
• banks and advisors mandated for a refinancing or liability management exercise.

Established transactional infrastructure & practical management approach

In capital markets transactions, external counsels (often acting for the issuer or the lead manager) or banks typically take the operational lead in preparing and maintaining the insider list templates. This delegation streamlines the process and ensures professional-level compliance, while minimising the internal administrative burden of the issuer. Several practical features contribute to this efficiency:

• Use of deal-specific lists: issuers often maintain a deal-specific insider list only when necessary (for example, during a non-public refinancing discussion or consent solicitation). Once the event becomes public, the list can be closed and archived. This transactional approach avoids ongoing maintenance of a master insiders’ list.
• Leveraging third-party templates and tools: many law firms and banks provide standardised insider list templates or digital compliance tools pre-aligned with MAR. These automate timestamping and version control, reduce compliance risk and manual effort.
• Limited updates and clear triggers: it is recommended to define clear internal triggers for when a new insider list must be opened e.g.: the decision to engage advisors for a confidential financing; the drafting of a non-public offering memorandum; or the receipt of non-public credit rating action.

These good practices ensure that the issuer acts consistently and proportionately, without overcomplying. As a result, MAR compliance becomes a structured process rather that a reactive burden.

MARKET SOUNDINGS AND INTERNATIONAL ALIGNMENT

Market soundings involve testing investor interest and assessing market conditions before launching a transaction. It helps issuers gather feedback on pricing, timing and structure, reducing uncertainty and improve successful outcomes. While interactions in the context of a market sounding often involve disclosing inside information, it constitutes a safe harbour to the prohibition of unlawful disclosure of inside information when conducted in accordance with the MAR requirements.

As a consequence, any disclosure of inside information made in the course of a market sounding in accordance with MAR is deemed to be made in the normal exercise of a person’s employment, profession or duties[9].

As a rule, where an issuer or a person acting on its behalf or for its account, discloses any inside information to any third party in the normal course of the exercise of an employment, profession or duties, they must make complete and effective public disclosure of that information, simultaneously in the case of an intentional disclosure, and promptly in the case of a non-intentional disclosure, unless the person receiving the information owes a duty of confidentiality, regardless of whether such duty is based on a law, regulations, articles of association, or a contract (which is typically the case in the context of a market sounding).

While market soundings procedures can appear formal, frequent bond issuers have adapted effectively over time. Many now prefer to announce transactions earlier, which reduces the need for lengthy sounding processes and lightens the overall compliance burden.

The market sounding regime as formerly set out under MAR was widely criticised for being overly rigid and bureaucratic, leading numerous market participants to avoid formal soundings due to concerns about being placed on insiders’ lists and facing trading restrictions, thereby limiting early market engagement and reducing transparency.

In light of these concerns, the recent amendments introduced by the Listing Act[10] have meaningfully eased these obligations by making the market sounding regime under MAR now optional[11]. Issuers can decide whether to follow the formalised framework or to rely on alternative approaches, as long as they can demonstrate that no unlawful disclosure of inside information has occurred or that it was done in the normal exercise of a person’s employment, profession or duties.

This evolution marks a positive step forward by offering greater flexibility, reducing compliance costs, and facilitating smoother and more timely communication with investors. The change is especially beneficial for frequent issuers in the debt markets, where speed and efficiency in fundraising are crucial. Importantly, it also provides significant relief for SMEs, which often face disproportionate regulatory burdens, thereby supporting their access to capital and encouraging more dynamic market participation.

Bond transactions, especially in the high-yield space, are predominantly directed at institutional or qualified investors within the meaning of the Prospectus Regulation[12]. Such investors understand and manage confidentiality obligations and are typically bound by non-disclosure agreements before receiving sensitive information. Disclosures made in the normal exercise of duties under confidentiality arrangements to a limited number of qualified investors are not considered as unlawful disclosures of inside information.

Although the MAR safe harbour is now optional, should a market sounding be launched, a distinction should be drawn when dealing with equity securities as opposed to debt instruments. Prior to announcing a capital increase or share offering, equity issuers must run detailed ‘wall-crossing’ processes, document investor contacts, and manage timing risks (e.g., leaks could disrupt pricing in a live market). Soundings for new bonds issues on the other hand are usually directed to a smaller, professional investor group. International Capital Market Association (ICMA)’s standard forms and scripts are a useful tool to streamline the process.

Finally, where an offer of securities is addressed solely to qualified investors within the meaning of the Prospectus Regulation, communication of information to those qualified investors for the purposes of negotiating the contractual terms and conditions of their participation in an issuance of bonds by an issuer that has financial instruments admitted to trading on a trading venue, or by any person acting on its behalf or on its account, shall not constitute a market sounding.

Such communication shall be deemed to be made in the normal exercise of a person’s employment, profession or duties as provided for under MAR and therefore shall not constitute unlawful disclosure of inside information. That issuer or any person acting on its behalf or on its account shall ensure that the qualified investors receiving the information are aware of, and acknowledge in writing, the legal and regulatory duties entailed and are aware of the sanctions applicable to insider dealing and unlawful disclosure of inside information.

MANAGERS’ TRANSACTIONS AND HIGH YIELD DEBT INSTRUMENTS

Under Article 19 of MAR, PDMRs and persons closely associated to them (as defined in MAR), such as directors or senior executives, must notify transactions involving the issuer’s share when the total value exceeds €20,000 within a calendar year. This requirement ensures transparency regarding insider dealings.

While in equity financings, this threshold is often reached due to PDMRs’ direct involvement in share transactions or incentive schemes, the situation is very different in the context of debt issuances, particularly private placements and high-yields offerings aimed at institutional investors. Indeed, in said scenario, PDMRs rarely (if never) participate directly making the pool of relevant ‘PDMRs’ smaller, if non-existent and notifications unmaterial. As a result, the €20,000 threshold is rarely exceeded, and reporting obligations under MAR occur infrequently, reducing the overall compliance burden.

MARKET MANIPULATIONS RULE

As seen above, equity securities are by nature more exposed to price volatility and market manipulation. Practices such as ‘painting the tape’ or false rumours can immediately distort share prices and attract regulatory scrutiny. Trading volumes and retail activity make equities especially sensitive.

Debt securities (notably high-yield bonds) on the other hand are less liquid, more over-the-counter-driven, and less prone to distortion from small trades. Supervisory authorities expect transparency in allocations, but manipulation scenarios are rarer and easier to prevent with basic record-keeping.

The contrast shows that MAR compliance for bond issuers is more predictable, and less reputationally sensitive than for equity issuers. A Luxembourg high-yield bond issuer can rely on a lean compliance toolkit; decision tree for inside information, template market-sounding forms, a PDMRs’ list, and record logs.

RECAP TABLE: MAR OBLIGATIONS EQUITIES VS. BONDS

WRAPPING UP

Almost a decade after its adoption, MAR has proven far less burdensome than initially feared, particularly in debt markets. While ensuring transparency, consistency, and investor protection, MAR applies in a proportionate way that recognises the specific dynamics of bond issuances, private placements, and professional investors.

The Listing Act has reinforced this balanced approach by easing obligations notably for SMEs and allowing greater flexibility for frequent issuers. Far from deterring activity, MAR boosts investors’ confidence and reinforces the EU’s position as a global hub for capital markets.

Luxembourg, at the heart of Europe, through LuxSE and its pioneering LGX, demonstrates how regulatory clarity can be turned into a true competitive edge by attracting global issuers and consolidating its leadership in debt and sustainable finance.

For Luxembourg issuers, MAR’s real weight depends on the type of instrument. While equity issuers must operate full disclosure frameworks: insider committees, real-time market monitoring, and comprehensive investor-relations processes, bond issuers (particularly in the high-yield or privately placed space) on the other hand can meet MAR obligations through proportionate, lean tools such as e.g. a decision tree for assessing inside information (linked to financial covenants, ratings, or default events), pre-approved market-sounding scripts aligned with ICMA/ESMA templates, etc. This framework provides a defensible compliance posture without overburdening operations, an important distinction from equity markets where the compliance infrastructure must be continuous and extensive.

While the MAR may initially appear demanding, ultimately, navigating through its requirements can be much more manageable and straightforward especially for Luxembourg bond issuers. It is particularly true when MAR is approached with an appropriate compliance framework and a clear understanding of the applicable obligations from the outset. Ultimately, efficient implementation hinges on working with experienced advisors who combine technical expertise with practical market insight.

At Stellan Partners, our Capital Markets team combines deep regulatory knowledge with practical experience and regularly advises on all aspects of bond listings and ongoing compliance matters to assist issuers throughout each step of the process, from structuring and documentation to regulatory interaction and disclosure management. Our aim is to ensure compliance while streamlining the process to remain efficient, pragmatic and aligned with market practice allowing issuers to focus on a smooth and successful issuance, confident that all regulatory aspects are thoroughly addressed. For more information on listing processes, requirements of the LuxSE and how we can assist you please refer to our brochure on the “Listing of bonds on the Luxembourg Stock Exchange”[13].

[1]Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse, as amended.

[2]Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation, as amended.

[3]Articles 8 and 14 of MAR.

[4]Inside Information refers to non-public, precise information relating directly or indirectly to an issuer or financial instrument, which could likely have a significant effect on the price if made public. It is a central concept in MAR, forming the basis for prohibitions on insider dealing and unlawful disclosure of Inside Information.

[5]Articles 10 and 14 of MAR.

[6]Article 19 of MAR.

[7]Article 11 of MAR.

[8]https://www.luxse.com/about-us/press-centre/Record-listing-numbers-secure-solid-2024-revenues-for-LuxSE

[9]MAR prohibits any person from disclosing inside information it possesses, unless such disclosure is made in the normal exercise of that person’s employment, profession or duties.

[10]Regulation (EU) 2024/2809 of the European Parliament and of the Council of 23 October 2024 amending Regulations (EU) 2017/1129, (EU) No 596/2014 and (EU) No 600/2014 to make public capital markets in the Union more attractive for companies and to facilitate access to capital for small and medium-sized enterprises.

[11]Please read our news available on https://stellanpartners.lu/part-ii-the-listing-act-key-updates-to-mar/

[12]Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC, as amended.

[13]content/uploads/2026/01/Stellan-Partners-Listing-of-Bonds-WEB.pdf