European Securities and Markets Authority Publishes Final Report on Guidelines for Disclosure of Inside Information and Interactions with Supervisors

The European Securities and Markets Authority has published its final Market Abuse Guidelines on the disclosure of inside information and interactions with national prudential regulators under the EU Market Abuse Regulation. The final guidelines implement the changes to the existing guidelines as proposed in ESMA's July 2021 consultation, with minor amendments.

Issuers of financial instruments that fall within the scope of the EU MAR must publicly disclose, as soon as possible, inside information that directly concerns them. However, issuers are permitted to delay disclosure if:
 

• Immediate disclosure is likely to prejudice an issuer's legitimate interest;
• Delay of disclosure is not likely to mislead the public; and
• The issuer is able to ensure the confidentiality of the information.

The amended guidelines:
 

• Add intended redemptions, reductions and repurchases of own funds by issuers that are pending regulatory authorization to the list of legitimate interests;
• Add draft Supervisory Review and Evaluation Process decisions made by EU national regulators, which form part of the EU's implementation of Pillar 2 of the Basel Framework, to the list of legitimate interests; and
• Clarify that Pillar 2 Capital Requirements are likely to qualify as "inside information" and would require public disclosure as soon as possible, unless the conditions for delayed disclosure are satisfied. In the final guidelines, ESMA has also added that firms should assess price sensitivity considering the magnitude of the difference between the firm's Pillar 2 Capital Requirements and their current level of capital. ESMA amended its consultation proposal regarding Pillar 2 Capital Guidance, by stating that this may be price sensitive (as opposed to being "likely to be" price sensitive). The guidelines also include examples where Pillar 2 Capital Guidance is expected to be price sensitive e.g., where the firm's Pillar 2 Capital Guidance is not in line with market expectations, so a price impact can be expected.

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