ESMA's Consultation Paper On Updates To Guidelines On Delay In The Disclosure Of Inside Information

Article 17 of the Market Abuse Regulation ("MAR") provides that issuers should publicly disclose inside information that directly concerns them as soon as possible. Where the relevant conditions are met, issuers may delay the disclosure of inside information under article 17(4) of MAR and, in the case of credit and/or financial institutions, article17(5) of MAR. In terms of article 17(4), issuers can delay the disclosure of inside information under the following conditions:

1. immediate disclosure is likely to prejudice an issuer's legitimate interest;
2. delay of disclosure is not likely to mislead the public; and
3. the issuer is able to ensure the confidentiality of the information.

In this connection, ESMA had previously issued guidelines which ("MAR Guidelines") which provide a non-exhaustive, indicative, list of legitimate interests of issuers that are likely to be prejudiced by immediate disclosure of inside information and a list of situations where delay of disclosure is likely to mislead the public.

In order to build and expand on the MAR Guidelines, ESMA has issued a consultation paper with a view to expanding the MAR Guidelines in the context of the interaction between the transparency obligations under MAR vis-à-vis inside information and the EU prudential supervisory framework. Through this consultation paper, ESMA is consulting on proposals to amend its MAR Guidelines by adding:

1. to the existing list of legitimate interests: (i) the case where institutions intend to carry out redemptions, reductions and repurchases of own funds, pending regulatory authorisation; and (ii) the case of draft Supervisory Review and Evaluation Process (SREP) decisions or any preliminary information thereof; and
2. a separate section to the MAR Guidelines clarifying that Pillar 2 Capital Requirements (P2R) and Pillar 2 Capital Guidance (P2G) are likely to meet the definition of inside information under MAR and would, in turn, require public disclosure as soon as possible, unless the conditions for a delayed disclosure are met.

ESMA has informed the market that it will consider the responses it receives to the consultation paper and expects to publish a final report including its amended MAR Guidelines at the end of 2021.

In view of the points on which ESMA is consulting, listed institutions are invited to carefully read the consultation paper and, if inclined to do so, submit online responses by 27 August 2021.

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