On 28 November 2016, the FCA published a consultation paper (CP16/38) with proposed amendments to DTR 2.5 (delaying disclosure of inside information) to make its rules consistent with ESMA's Guidelines on delay in the disclosure of inside information, which were published on 20 October 2016. The consultation closes on 06 January 2016.
The Market Abuse Regulation (MAR) allows issuers to delay disclosing inside information to the public provided that all of the following conditions are met:
- immediate disclosure is likely to prejudice the legitimate interests of the issuer
- delay of disclosure is not likely to mislead the public, and
- the issuer is able to ensure the confidentiality of that information.
The ESMA Guidelines provide a non-exhaustive and indicative list of legitimate interests of issuers that are likely to be prejudiced by immediate disclosure of inside information and of situations in which the delay of disclosure is likely to mislead the public.
In amending DTR 2.5, the FCA is proposing to follow the same approach that it adopted when implementing MAR. This entails deleting the FCA Handbook material that conflicts with or duplicates the ESMA Guidelines and cross-referring to those guidelines where appropriate.
The proposed changes to DTR 2.5 include:
- adding a general sign post to the ESMA Guidelines at DTR 2.5.1BG
- deleting DTR 2.5.3G (which sets out circumstances to which legitimate interests to delay disclosure may relate) as it directly overlaps with paragraph 5(1)(8)(a) to (f) of the ESMA Guidelines
- minor amendments to DTR 2.5.4G (which considers the scope and application of the provisions as to the delay of disclosure) so that cross-references are to the ESMA Guidelines, and
- deleting the final sentence in DTR 2.5.5G as this is considered to be incompatible with the ESMA Guidelines. The sentence suggests that there are unlikely to be circumstances beyond those referred to where delay would be justified whereas the ESMA Guidelines, being a non-exhaustive list, leaves open the possibility of the list being amended in the future.
DTR 2.5.2 and the rules on selective disclosure in DTR 2.5.6A to DTR 2.5.9G are not being amended.
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