Seite - 126 - in Austrian Law Journal, Band 2/2019

ALJ 2019 Hartlieb 126 B. Objectives of the Reporting Obligation Various objectives are generally attributed to the disclosure of managers' transactions, irrespective of the concrete objectives of Art 19 MAR: 12 a disclosure is said to be a highly valuable source of information to investors (1); it also aims at the equal treatment of investors (2). It furthermore contributes to market transparency in the form of shareholding transparency (3) and serves the objective of market integrity (4). 1. Source of Information A guiding principle of the reporting requirement is that reporting may be a valuable source of information for investors because it could have a signal effect for the investor audience:13 As managers tend to act on a better information basis than other investors due to their proximity to the issuer, their transactions may reflect assessments of the company and the market that are based on an advantage of information.14 If executives sell shares, for example, this could indicate a future negative performance of the issuer. Conversely, a purchase could signal that the manager considers the share to be undervalued and expects it to rise. If such transactions are reported, the information base of other investors will improve.15 This enables them to participate in the manager's advantage of information.16 However, the suitability of the reporting obligation to achieve this objective must be qualified in two respects: it should first be noted that a concrete business transaction of a manager does not have to be based on an advantage of information. An executive can trade the issuer's financial instruments for many reasons, for example to obtain quickly needed liquidity.17 Since only the transaction itself must be reported, but not the motivation underlying it, there is a risk that investors will assume a non-existent information advantage, thus misinterpreting the report. Moreover, the value of the signal effect of reports generally depends on the fact that the only transactions to be reported are those in which a possible information advantage can be exploited at all. If transactions are also to be disclosed which cannot be based on any information advantage, for example in cases where the manager acquires a financial instrument without actively taking action (e.g. an acquisition by inheritance), this significantly weakens the signal effect of reports. This is because investors must first eliminate irrelevant reports from all available reports and then identify those which are potentially price-sensitive as an advantage of information has actually been exploited. 12 For these see chapter II.C. 13 See Fleischer, supra note 10, at 1220; Susanne Kalss & Martin Oppitz & Johannes Zollner, Kapitalmarktrecht at 19/5 (2nd ed. 2015); Christoph Kumpan, Die neuen Regelungen zu Directors‘ Dealings in der Marktmissbrauchsverordnung, AG 446, 448 (2016); This is expressly confirmed in the German government's draft for the introduction of section 15a dWpHG, BT-Drucks. 14/8017, 87 f. For a critical account, see Gunnar Schuster, Kapitalmarktrechtliche Verhaltenspflichten von Organmitgliedern am Beispiel des § 15a WpHG, 167 ZHR 193, 199 (2003). 14 Fleischer, supra note 10, at 1220; Franz Hartlieb & Zurab Simonishvili, Directors‘ Dealings nach der Marktmissbrauchsverordnung, ZFR 61, 61 et seq (2015); Kumpan, supra note 13, at 448. 15 Fleischer, supra note 10, at 1220; Hartlieb & Simonishvili, supra note 14, at 61 et seq. 16 Studies have shown that investment strategies that track executive transactions generate on average higher returns than the market; see Fleischer, supra note 10, at 1220; Markus Pfüller, § 15a, in Wertpapierhandelsgesetz Kommentar, 25 (Andreas Fuchs ed, 2nd ed. 2016); for a critical account, see Stefan Grundmann, Marktmissbrauchsregime, in Großkommentar Handelsgesetzbuch, Band 11/1, mn 531, (Claus-Wilhelm Canaris/Mathias Habersack/Carsten Schäfer eds, 5th ed. 2016). 17 Sethe & Hellgardt, supra note 1, at 10.