Under Article 17 of Regulation (EU) No 596/2014 (MAR), an issuer of financial instruments must inform the public as soon as possible of inside information which directly concerns that issuer. This obligation aims to establish information equality in the market in a timely manner and to mitigate the risk of trading on the basis of non-public, price-sensitive information. What information should the issuer disclose to you?

What Information the Issuer Must Disclose

The issuer must disclose inside information directly concerning them as soon as possible, in a manner that enables fast access and complete, correct, and timely assessment of the information by the public. The issuer must not combine the disclosure of inside information with the marketing of its activities and must preserve the information on its website for a period of at least five years.

For specific information to constitute inside information, it must satisfy four core elements. First, it must be of a precise nature. Second, it must not have been made public. Third, it must relates, directly or indirectly, to one or more financial instruments or to their issuers. Fourth, if it were made public, it would be likely to have a significant effect on the prices of those financial instruments.[1]

When the Issuer Must Disclose Information

While the issuer must act quickly, the obligation to disclose information "as soon as possible" does not imply absolute immediacy without any internal evaluation. The format and content of the disclosure must also be sufficiently clear and comprehensible. Therefore, the element of "as soon as possible" must be aligned with the requirement for a complete, correct, and timely assessment of the information. The responsibility for assessing whether information constitutes inside information lies with the issuer's management, or more precisely, its competent bodies.

Possible Delay of Public Disclosure of Information

Delaying the public disclosure of inside information is permissible only under statutory conditions.

However, this remains an exception rather than the rule. It is conditional upon cumulative fulfillment of three sets of requirements:

• Immediate disclosure is likely to prejudice the legitimate interests of the issuer. Not every commercial disadvantage is sufficient; it must be an interest that can be deemed legitimate within the meaning of the Union transparency regime.

• Delay of disclosure is not likely to mislead the public.

• The issuer must be able to ensure the confidentiality of that information; in the event of a breach of confidentiality, including a sufficiently precise rumor, or in the case of selective disclosure to a third party, the obligation arises to disclose the information to the public immediately.

By the nature of this exception, the issuer must continuously monitor these conditions. It is not sufficient that they are met at the time of the initial decision to delay. If they subsequently cease to be met, the information must be disclosed. This is most apparent in the case of the confidentiality condition. In the event of a delay, records of the reasons for the decision and supporting documentation must be maintained.

If inside information is disclosed intentionally, it must be disclosed simultaneously. If it is disclosed unintentionally, it must be disclosed immediately thereafter.

Insider Trading in Practice

In protracted processes, such as an acquisition, restructuring, or the negotiation of a major transaction, an intermediate step of that process may already constitute inside information. However, the more recent regulatory framework more clearly separates two questions: when information arises as inside information, and when the issuer must disclose it to the public.

A certain intermediate step in a decision-making process may still represent inside information and is subject to insider dealing prohibitions and confidentiality rules. This change is highly important from a systemic perspective. Neither the issuer nor an insider can defend themselves by claiming that "a final decision had not yet been made," if a certain intermediate step has already reached a level of specificity and price relevance that makes it inside information.[2]

The information does not need to be final, nor does it need to enable a precise prediction of the price direction; it is sufficient that it is specific enough and capable of significantly affecting the price.[3]

Record-Keeping as a Supervisory Tool

To ensure uniform application, European legislation explicitly envisages the issuance of interpretative and implementation tools by the European Securities and Markets Authority (ESMA). These concern areas where closer specification of statutory obligations is required.

In the field of inside information, ESMA has long emphasized that information must be disclosed and recorded in a manner that enables supervisory authorities to effectively investigate potential cases of market abuse.

This is evident, for example, in its opinion on insider lists for issuers on SME growth markets, where ESMA rejected an over-simplification of insider lists on the grounds that it "could significantly reduce the usefulness of insider lists in the investigation of market abuse.

According to ESMA, it is not sufficient to maintain only a general list of persons with "regular access" to inside information, which in practice does not distinguish who had access to specific information. Otherwise, supervisory authorities would have to establish in every investigation which persons, despite generally having access to sensitive information, actually had no knowledge of that specific information. This would also eliminate the distinction between persons with regular access and so-called permanent insiders, i.e., persons who have access to all inside information at all times.[4]

Conclusion

The MAR rules are a tool for protecting market integrity and ensuring effective supervision. For the issuer, this results in a practical need to adapt their internal compliance framework, in particular to distinguish precisely between the occurrence of inside information and the emergence of the obligation to publish it, to revise the rules for delaying disclosure, to strengthen documentation of the legitimate transmission of information to investors and advisers, and to clearly allocate responsibility for insider lists and related record-keeping obligations.

Conversely, for capital market investors, this regulation provides assurance that the issuer handles information material to the price of financial instruments in a proper and transparent manner.