How do issuers deal with pre-close calls? Is inside information being passed on? This was a suspicion expressed in numerous submissions received by BaFin at the end of 2023. The reasons for the suspicions were conspicuous price and volume movements on the days of such calls. BaFin looked into this issue and more closely examined market practice in Germany in 2024. This revealed that pre-close calls (see info box) are an important part of the communication between issuers and the capital market. There were only a few isolated cases of strongly above-average price fluctuations on the days of pre-close calls. BaFin investigated these cases in more detail and found that there were no indications that these fluctuations were triggered by the unlawful disclosure of inside information.

In 2024, BaFin asked the 90 companies in the DAX and MDAX stock market indices how they handle pre-close calls. 60 of them, i.e. 66.7%, responded. BaFin's analysis of pre-close calls was a fact-finding exercise in which BaFin explored the current market practice for pre-close calls in Germany. The analysis does not claim to meet scientific standards. The response rate of 66.7% also allows only limited conclusions to be drawn about market practice as a whole.

In order to gain a comprehensive picture, BaFin also spoke with analysts and representatives of associations during the fact-finding exercise. These findings are not explicitly reported in the analysis.

Pre-close calls are widespread in Germany

BaFin’s survey revealed that 63.3% of the 60 participating companies carry out pre-close calls. These calls play a particularly important role for larger issuers. 71.9% of the participating DAX companies stated that pre-close calls are an integral part of their capital market communication. Companies in the MDAX make less use of this tool (53.6%).

Issuers often offer pre-close calls because analysts demand them. They help to ensure that the analyst consensus is correct. “Analyst consensus” refers to an estimate of key figures that is determined from the various forecasts of the individual analysts. More than 90 per cent of the participating companies stated that they conduct pre-close calls as one-to-one meetings.

No indications of unlawful disclosure of inside information  

Pre-close calls have been associated with increased price movements. BaFin’s investigation shows that this is usually not true. The price movements were below average for around 70 per cent of the pre-close calls analysed. No increased price and volume fluctuations were identified that could have been related to these pre-close calls.

In individual cases, there were increased price movements following pre-close calls. BaFin investigated these cases and found no evidence that the increases in price movements were caused by inside information being unlawfully disclosed.

Transparency builds trust

In 2024, the European Securities and Markets Authority (ESMA) published "Good practices in relation to pre-close calls", which it expects companies to adhere to. BaFin welcomes ESMA's intention to raise awareness among issuers and draw their attention to the applicable legal requirements.

BaFin, too, encourages issuers to be as transparent as possible with pre-close calls. The goal must be to counter even the mere appearance of the unlawful disclosure of inside information as far as possible. This can be achieved, for example, by organising the pre-close call as a group call with as few restrictions as possible on who can participate, and by announcing these dates on the issuer's website.

BaFin is aware that one-size-fits-all solutions for pre-close calls are neither practicable nor sensible. An appropriate approach should take into account the respective circumstances of the issuer (e.g. scope of analyst coverage and company size) from a proportionality perspective.

BaFin points out that if the issuer does unintentionally disclose inside information during a pre-close call, they must publish this information immediately in order to restore equal access to information. Anyone who has unlawfully received inside information in pre-close calls may not disclose this information themselves or engage in insider dealing (Article 14 of the Market Abuse Regulation).

If BaFin finds indications of possible violations of the law in pre-close calls, it will continue to investigate individual cases in the future.