CopiedInsider Lists – 6 Situations When You Are Allowed To Delay Disclosure of Inside Information

The integrity of financial markets relies on mechanisms for controlling the flow of inside information. This article highlights 6 situations when MAR-regulated entities may deviate from the general rule of immediate disclosure of inside information.

General Prerequisites for Delaying Disclosure of Inside Information Copied

You may delay disclosure if all the following conditions are met:

• Delayed disclosure is not likely to mislead the public.
• The company can ensure the confidentiality of the inside information.
• Immediate disclosure is likely to prejudice the legitimate interest of the company.

According to MAR, you must document how you fulfill the above criteria. See an overview of how this is done in Logwise.

Why Delay Disclosure of Inside Information? Copied

If the immediate disclosure of inside information is considered to damage the issuer’s legitimate interests, the ESMA guidelines highlight a few examples where delayed disclosure may be allowed:

1. The Company Has Invented a Product Copied

The company has developed a product or invention where the immediate disclosure would likely jeopardize the company’s intellectual property rights (e.g., results of clinical trials of new drugs).

2. The Company Plans to Buy or Sell a Larger Holding in Another Company Copied

The company plans to buy or sell a larger holding in another company, and disclosing such information would likely jeopardize the implementation of this plan.

3. The Company Participates in Ongoing Negotiations Copied

The company participates in ongoing negotiations, in which immediate disclosure will likely jeopardize results. Examples include:

• Mergers, acquisitions, splits, and spin-offs.
• Purchases or disposals of major assets or branches of corporate activity.
• Restructurings and reorganizations.

4. The Company’s Financial Viability Is in Grave and Imminent Danger Copied

The company’s financial viability is in grave and imminent danger (although not within the scope of applicable insolvency law). In addition, immediate disclosure of inside information would seriously prejudice the interests of existing and potential shareholders by jeopardizing negotiations designed to ensure the company’s financial recovery.

5. The Inside Information Relates to Decisions Needing Additional Approval Copied

The inside information relates to decisions taken (or agreements concluded) by the company’s management body, which must also be approved by another body (e.g., a supervisory board under the German Dual Board model) other than the shareholders’ general meeting. Delayed disclosure is permitted provided that:

• Immediate disclosure of this information before the definitive decision is taken would jeopardize a proper assessment by the public.
• The company arranges for the definitive decision to be taken immediately.

6. A Transaction Is Subject to Public Authority Approval Copied

A transaction previously announced is subject to a public authority’s approval, with additional conditions. Immediate disclosure of these requirements could impact the company’s ability to meet them, potentially preventing the deal’s success.

Are There Other Situations Where Delaying Disclosure Would Be Appropriate? Copied

The guidelines are not exhaustive, and various local regulatory adaptations exist. For example, in Sweden, a practice has developed around creating insider lists ahead of financial reports, which is not explicitly based on the guidelines above.

Conclusion Copied

Delaying disclosure of inside information can be crucial in protecting a company’s interests. Understanding when and how to apply for these exemptions under MAR is key to maintaining compliance while safeguarding sensitive company information. Each situation must be carefully documented and reviewed, ensuring the prerequisites for delayed disclosure are strictly adhered to.

Master delayed disclosure rules—book a demo today and streamline your insider list management with Logwise.

Related Information Copied

Financial reporting & MAR: Read more about delayed disclosure of inside information concerning financial reporting

Guidelines for Advisors: If you handle inside information on behalf of an issuer you might also need to create insider lists