Topic Market manipulation Ad hoc disclosure
The Market Abuse Regulation (MAR) obliges all issuers of financial instruments to notify the market of inside information so that other market participants are not put at a disadvantage to company insiders. The ad hoc disclosure requirement applies to all issuers who have requested or received admission of their financial instruments to trading on a regulated market or a multilateral trading facility (MTF) in a Member State. The ad hoc disclosure obligation thus also applies to issuers only trading on an MTF, subject to the issuer having expressly consented to its inclusion in trading by having applied for this either itself or through a third party or having consented to its inclusion. From 3 January 2018, the disclosure obligation also applies to issuers who have received admission of their financial instruments to an organised trading facility (OTF) as well as emission allowance market participants. If companies fail to disclose inside information altogether or if the information they provide is late, false or incomplete, BaFin will take appropriate action.
It is only if listed companies notify all market participants rapidly and comprehensively of any inside information that investors can make well-founded decisions and are not put at a disadvantage to insiders. For this reason, domestic issuers have a legal obligation to disclose to the public immediately – i.e. ad hoc – any facts about their company that have the potential to influence the price of the financial instrument and directly concern the issuer (Article 17(1) of the MAR).
For the purposes of such disclosure, the issuer is obliged by law to use a widely disseminated electronic information system and a combination of media to publish the information Europe-wide. Companies must also forward these disclosure notices to the company register, to be stored there. If the company has a website, any inside information must be published there for at least five years.
From 3 January 2018, emission allowance market participants whose emissions exceed certain minimum thresholds are obliged by law to publicly disclose inside information on emission allowances that they hold and require for their business activities in an effective and timely manner. This includes, for example, the planned or unplanned unavailability of installations.
BaFin intervenes if a company fails to disclose inside information covered by the ad hoc disclosure requirement altogether or if the information it provides is late, false or incomplete. BaFin also checks whether issuers or emission allowance market participants who have availed themselves of the exemption option provided for by law have exempted themselves from the ad hoc disclosure requirement in a proper manner.
At the European level, Article 17 of the MAR is supplemented by various Level 2 and Level 3 measures, while at the national level in Germany it continues to be supplemented by the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG), which has been amended with respect to the MAR and the relevant implementing provisions by the First Financial Markets Amendment Act (Erstes Finanzmarktnovellierungsgesetz – 1st FiMaNoG) and Second Financial Markets Amendment Act (Zweites Finanzmarktnovellierungsgesetz – 2nd FiMaNoG). Moreover, the current version of the German Securities Trading Reporting and Insider List Regulation (Wertpapierhandelsanzeige- und Insiderverzeichnisverordnung – WpAIV; from 3 January 2018: German Securities Trading Reporting Regulation (Wertpapierhandelsanzeigeverordnung – WpAV)) – will remain applicable for the time being, but the MAR and its delegated and implementing regulations have priority where they contain corresponding or diverging provisions.
Moreover, a revision of the Issuer Guideline (Emittentenleitfaden) is planned, as soon as administrative practice on the new provisions has become established. Until then, issuers can find guidance in the list of questions and answers on the ad hoc disclosure obligation for issuers and emission allowance market participants which has been published on the BaFin website. Questions of interpretation may also be sent to the e-mail address MAR@bafin.de. BaFin will regularly revise and expand the list on the basis of such input.