MAR PRE-CLOSE CALLS
ESMA issued a statement reminding issuers of their obligations under the EU Market Abuse Regulation (MAR) in the context of "pre-close calls" following recent reports of a connection between episodes of high volatility in share prices and "pre-close calls". In the statement, ESMA sets out examples of good practices that could reduce the risk of unlawful disclosure of inside information during "pre-close calls".
ESMA UPDATES ESEF REPORTING MANUAL
ESMA published an update of its Reporting Manual on the European Single Electronic Format (ESEF) and Annex II of the Regulatory Technical Standards on ESEF (RTS). The purpose of the manual is to promote consistency in the preparation of annual financial reports in the format specified in the RTS. Issuers are expected to follow the guidance in this manual when preparing their 2024 annual financial reports.
UK NATIONAL STORAGE MECHANISM (NSM)
The FCA recently consulted on changing the NSM data requirements for regulated information disclosed by UK listed issuers in accordance with the Disclosure Guidance and Transparency Rules (DTRs), the UK Listing Rules and the UK Market Abuse Regulation and standardising the way primary information providers submit information to the NSM. The NSM is an online archive of company information used by investors, analysts and other market participants.
LISTING ACT
The listing act (a package that will make EU public capital markets more attractive for EU companies and will make it easier for companies of all sizes, including SMEs, to list on European stock exchanges) was recently adopted by the European Parliament and the Council of the EU and is expected to be published in the Official Journal in Q4 2024. The package was first published in December 2022 and includes a regulation that will make amendments to the EU Prospectus Regulation, MAR and MiFIR (the Listing Regulation) and a directive on multiple-vote shares.
Key changes to be made to MAR under the Listing Regulation include:
- Share Buy Backs: Reporting obligations to benefit from the share buy-back exemption have been simplified; trades will be disclosed to the public in an aggregated form and will only need to be reported to the competent authority of the most relevant market in terms of liquidity.
- Market Soundings: It is clarified that the market soundings regime is an optional safe harbour and that failure to comply does not automatically amount to unlawful disclosure. The definition of "market sounding" is amended to include communications of information where there is no public announcement of a transaction and the cleansing obligation is amended so that it does not apply where information has been announced publicly.
- Protracted Processes: Immediate disclosure will no longer be required for inside information related to intermediate steps in a "protracted process" (e.g. an M&A transaction) and only the final circumstances or event is required to be disclosed. A Commission delegated act will set out a non-exhaustive list of final circumstances/events which would trigger the disclosure obligation and the moment when that trigger is deemed to have occurred. The rules regarding delayed disclosure of inside information will not apply to intermediate steps in a protracted process. When inside information regarding intermediate steps in a protracted process has not been disclosed, but the confidentiality of that information is no longer ensured, the issuer will have to disclose it as soon as possible.
- Delayed Disclosure: The second condition for delayed disclosure of inside information (delayed disclosure unlikely to mislead the public) will be replaced by a new condition, that "the inside information is not in contrast with the latest public announcement or other type of communication by the issuer on the same matter". A Commission delegated act will set out a non-exhaustive list of situations relevant to the new second condition. This change will apply 18 months after the Listing Regulation is published in the Official Journal.
- PDMR Transactions: The PDMR reporting threshold will increase to transactions totalling EUR20,000 in a calendar year (competent authorities may further increase the new threshold to EUR50,000 or reduce it to EUR10,000). The existing exemption to the prohibition on trading during a closed period in respect of employee shares or saving schemes will be extended to cover financial instruments other than shares. An additional exemption is provided for trading during a closed period where the transactions or trade activities do not relate to active investment decisions or that result from external factors or third parties, including the exercise of derivatives, based on predetermined terms.
IMPACT OF SOCIAL MEDIA INFORMATION IN SECURITIES MARKETS
ESMA published an article, Social media sentiment: Influence on EU equity prices, in which it notes that the impact of social media information in securities markets is a growing market and public policy concern. The article shows a correlation between social media interactions and stock excess returns at the very short term, suggesting that information spreading on social media platforms influences investor trading choices and may amplify short-term financial market movements.
UK PUBLIC OFFERS AND ADMISSIONS TO TRADING REGULATIONS REGIME AND PUBLIC OFFER PLATFORMS
The FCA is consulting on a new Public Offers and Admissions to Trading Regulations regime (which will replace the UK's version of the Prospectus Regulation). The consultation paper sets out the FCA's proposed rules for companies seeking to admit securities to a UK regulated market or Primary MTF under the new regime. The consultation closes on 18 October 2024.
The FCA is also consulting on the new regime for public offer platforms (which forms part of the new Public Offers and Admissions to Trading Regulations). Firms operating a public offer platform will allow companies to raise capital by offering securities outside a public market to a broad investor base, including retail consumers. The consultation closes on 18 October 2024.
FCA PRIMARY MARKET BULLETIN
The FCA has published Primary Market Bulletin 50, which focuses on the sponsor regime.
LSE PUBLISHES DIVIDEND PROCEDURE TIMETABLE FOR 2025
The LSE published its Dividend Procedure Timetable for 2025 which acts as a guide for companies with shares issued on the LSE's main market or AIM on setting their interim and final dividend programmes.
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