Ad hoc disclosure
The Securities Trading Act (Wertpapierhandelsgesetz – WpHG) imposes a statutory requirement on listed companies to notify the market of insider information so that other market participants are not put at a disadvantage to company insiders. If companies fail to disclose the information at all or if the information they do provide is late, false or incomplete, BaFin will take appropriate action.
Only if listed companies notify all market participants rapidly and comprehensively of any insider information can investors make well-founded decisions and not be put at a disadvantage to insiders. For that reason issuers have a statutory obligation to disclose immediately– i.e. ad hoc – facts about their company that are not public knowledge if such information has the potential to influence the price of the financial instrument and if it relates directly to the issuer (section 15 of the Securities Trading Act (Wertpapierhandelsgesetz – WpHG)). For the purposes of such disclosure, under the terms of the Act an issuer in Germany must use a widely disseminated electronic information dissemination system and a combination of media to disseminate the information Europe-wide. Companies must also forward these disclosure notices to the Company Data Register, which stores them.
BaFin intervenes if a company fails altogether to disclose inside information covered by the ad hoc disclosure requirement or if the information it does provide is late, false or incomplete. BaFin also checks whether issuers who have availed themselves of the exemption option provided for by the Act have exempted themselves from the ad hoc disclosure requirement in a proper manner.
