The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its Final Report on the amendment of the Market Abuse Regulation (MAR) guidelines on delayed disclosure in relation to prudential supervision. The Guidelines are adding certain cases to the list of legitimate interests of issuers for delaying public disclosure of inside information.
The Guidelines are aimed at providing clarity, enhancing legal certainty and fostering supervisory convergence and should assist issuers in conducting their assessment as to whether they meet the conditions to delay inside information in accordance with MAR.
The Guidelines also introduce clarifications on the institutions’ case-by-case assessment as to whether they would be in possession of inside information in relation to the institution-specific Supervisory Review and Evaluation Process (SREP) decisions received from their prudential competent authority, with particular reference to the Pillar 2 Capital Requirements (P2R) and Capital Guidance (P2G).
The amended Guidelines clarify the following:
- In case of redemptions, reductions and repurchases of own funds subject to supervisory authorisation, the institutions have a legitimate interest to delay the disclosure of inside information until the prudential competent authority has authorised the transactions;
- There is a legitimate interest for the institution to delay the disclosure of the draft SREP decision informally communicated to an institution, until that decision becomes final following the completion of the decision-making process of the prudential competent authority;
- In respect of the content of the SREP decisions, the P2R are expected to be considered as inside information and as highly likely to be price sensitive whereas P2G may only be inside information. Examples of situations where price sensitivity is expected are when:
- the difference between the P2G and the institution’s level of capital is not minor and is likely to involve a major reaction by the institution, such as a capital increase; and
- the institution’s P2G is not in line with market expectations, so a price impact can be expected.
This Final Report follows the publication of a Consultation Paper when ESMA proposed to provide clarifications, in the context of the interaction between the MAR transparency obligations vis-à-vis inside information and the prudential supervisory framework.
Next steps
A translation procedure will follow after the publication of this Final Report. The regular comply or explain procedure will be carried out ahead of the full application of the Guidelines. The Guidelines will be applicable 2 months after the publication of translations.
