More information on ESMA's consultation paper on its draft technical advice for delegated acts supplementing MAR and MiFID II
As outlined in our previous newsletter from 13 December 2024, the amendment to Article 17(1) of MAR under the Listing Act significantly narrows the scope and practical use of the delay mechanism in Article 17(4).
Effective from 5 June 2026, disclosure of inside information arising in the context of an intermediate step in a protracted process should take place only upon the final event or circumstance concluding those processes. The Listing Act recognizes and continues to foresee a mechanism to delay the disclosure, as there may still be circumstances where an issuer has a legitimate reason to delay the disclosure of inside information, even after the final event has taken place.
ESMA has recently published a new consultation paper, outlining its draft technical advice for delegated acts supplementing the Market Abuse Regulation (MAR) and MiFID II provisions (the "Consultation Paper").
This newsletter addresses ESMA's draft technical advice in relation to conditions to delay disclosure of inside information.
For further information on ESMA's draft technical advice in relation to disclosure of inside information in protracted processes, please refer to our previous newsletter.
Conditions to delay disclosure of inside information
The current MAR regime allows issuers to delay disclosure of inside information provided that the conditions specified under Article 17(4) of MAR are met, namely when:
- 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.
As outlined in our previous newsletter from 13 December 2024, the amendment to Article 17(1) of MAR under the Listing Act significantly narrows the scope and practical use of the delay mechanism in Article 17(4). Specifically, disclosure of inside information arising in the context of an intermediate step in a protracted process should take place only upon the final event or circumstance concluding those processes. This means that, except in cases where confidentiality can no longer be ensured, disclosure obligations no longer apply to intermediate steps, thereby reducing the need to rely on the delay mechanism in such situations.
As mentioned above, the Listing Act recognizes and continues to foresee a mechanism to delay the disclosure in MAR, as there may still be circumstances where an issuer has a legitimate reason to delay the disclosure of inside information, even after the final event has taken place. As an example of this, ESMA mentions that in the case of a procurement process, despite that the process may be considered concluded upon the awarding of the contract, where a confidentiality agreement subsists for the stand still period, immediate disclosure could prejudice a legitimate interest of the issuer that could permit the delay of disclosure, provided that the other conditions are met.
Another example mentioned by ESMA in the Consultation Paper is situations where the internal process has concluded for the issuer, but further actions or approvals are required from a public authority.
To address this, the mechanism for delaying disclosure of inside information has been maintained, with some modifications to specific conditions.
In particular, the provision under MAR Article 17(4)(b), whereby "delay of disclosure is not likely to mislead the public" has been amended to: "the inside information that the issuer or emission allowance market participant intends to delay is not in contrast with the latest public announcement or other type of communication by the issuer or emission allowance market participant on the same matter to which the inside information refers".
It should be noted that the conditions under MAR Article 17(4)(a) and 17(4)(c) remain unchanged. Accordingly, issuers must still demonstrate that immediate disclosure is likely to prejudice their legitimate interest (condition (a)) and that the confidentiality of the inside information can be ensured throughout the delay period (condition (c)).
In this context, the Commission's forthcoming delegated act is set to play a crucial role in shaping the practical application of the amended Article 17(4), as it will establish a non-exhaustive list of situations where the inside information that the issuer intends to delay is in contrast with the latest public announcement or other type of communication on the same matter to which the inside information refers, albeit with a narrower scope compared to today.
The insights provided in ESMA's Consultation Paper offer an important first look at ESMA's preliminary assessment, draft proposals for this list, and the interpretation and application of the delay mechanism, as discussed in more detail below.
The latest announcement or communication - types of communication
In the Consultation Paper, ESMA notes that the amendment to Article 17(4)(b) of MAR should reduce the burden for issuers, who should now carry out a more limited assessment, only covering their latest announcement or communication on the same matter.
The rationale being that only the latest announcement or communication would still be the one relied upon by the public and capable of influencing the price of the relevant financial instruments.
However, ESMA notes that while the amended Article 17(4)(b) refer specifically to the latest announcement or communication, there may be instances where the inside information to be delayed must be assessed against multiple announcements. This occurs when the issuer's position on the subject matter cannot be clearly determined from the most recent communication alone. Such situations are particularly relevant in cases involving a series of partial announcements, where only the combination of these statements provides a complete picture. This interpretation aligns with Recital 70 of the Listing Act, which refers to "previous public statements or other types of communications by the issuer."
With reference to "other types of communication by the issuer", ESMA understands that amended Article 17(4)(b) of MAR aims at covering a broad spectrum of messages and signals conveyed by the issuer to the market, and should not be limited to public announcements, provided that those have the ability of generating or influencing market expectations.
Based on this, ESMA's draft delegated regulation presents a comprehensive list of types of communication that, in ESMA's view, would have the ability of generating and influencing market expectations and which should therefore be considered relevant for the purpose of the assessment under Article 17(4)(b) of MAR as amended by the Listing Act.
This includes communications and press releases on the issuer's website or social media accounts, pre-close calls, communications in the context of the shareholder meeting, advertising and regulatory filings. In addition, ESMA considers that public interviews, roadshows, other public events (e.g. podcasts) and any other communication should be deemed relevant as long as those are delivered by persons perceived as representing the issuer.
Non-exhaustive list of examples of contrast between the inside information to be delayed and the latest announcement or communication
As mentioned, ESMA has been called for advice and has been requested to provide a list of examples where it is deemed that there is a contrast between the inside information that the issuer intends to delay and the latest public announcement or other types of communication by the issuer on the same matter to which the inside information refers.
In this regard, ESMA suggests that this list should encompass a broad range of scenarios throughout an issuer's lifecycle where such contrasts might occur, including, but not limited to, areas such as corporate governance, business strategy, corporate finance, and capital structure operations. However, ESMA emphasises that the list is non exhaustive and there may be other circumstances non listed in the delegated act that may give rise to a contrast between the inside information intended to be delayed and the latest announcement or communication. In those circumstance, a case-by-case assessment would be needed.
The non-exhaustive list presented by ESMA in the draft delegated act covers inside information which would represent a material change in relation to the issuer's latest public announcement or communication on:
- forecasted financial results or business objectives;
- environmental or social impact of a project or product;
- the financial viability of the issuer;
- capital structure operations;
- business strategy operations;
- contracts/deals;
- corporate governance operations.
In practice, this means that if the inside information the issuer seeks to delay represents a material change compared to the latest public communication - or according to ESMA a series of communications if the issuer's position cannot be clearly determined based solely on the most recent announcement - then the condition under Article 17(4)(b) of MAR, as amended by the Listing Act, would not be met. Consequently, the issuer would not be permitted to delay the disclosure of that inside information.
Plesner observations
The ESMA Consultation Paper introduces important clarifications and refinements to the conditions for delaying disclosure of inside information under the future MAR disclosure regime as amended by the Listing Act.
ESMA proposes a wide-ranging, non-exhaustive list of areas where contrasts between inside information intended to be delayed and previous communications might arise, providing clearer guidance to issuers when assessing whether a delay is permissible. ESMA also identifies a broad spectrum of communication types which would have the ability of generating and influencing market expectations, including press releases, social media updates, advertising, public events such as interviews and roadshows, shareholder meetings, regulatory filings, and other communications perceived as representing the issuer.
While the new regime underscores the importance of ensuring consistence across all forms of communication to avoid conflicts with delayed inside information, this will presumably not result in significant practical changes, as such consistency is largely already required and observed under the current regime.
In our view, the amendments represent a practical and welcome adjustment, as they replace the broader requirement to assess whether a delay would "mislead the public" with a more focused benchmark: whether the inside information intended to be delayed is in contrast with the issuer's latest public communication. In essence, going forward the focus is not on how the public might interpret the information but rather on a concrete comparison between the information being delayed and information previously disclosed by the issuer on the same subject.
While this change reduces ambiguity and provides greater legal certainty for issuers navigating their disclosure obligations, we do note, however, that it is largely consistent with the existing guidelines from ESMA. That said, the new Article 17(11) of MAR mandates ESMA to issue guidelines to establish a non-exhaustive indicative list of the legitimate interests of issuers for the delay of disclosure, and ESMA aims to review the existing MAR Guidelines on delayed disclosure in light of the new regime. Any practical implications of such review remain to be seen.
Although the amendments imposed by the Listing Act clearly underline the intention to preserve the possibility for issuers to delay disclosure of inside information, especially in connection with the occurrence of the final event in a protracted process, it remains uncertain whether this intention extends to enabling the delay of disclosure of inside information in relation to non-protracted processes, i.e. "one-off" events. The amended MAR provisions do not explicitly address this question, and ESMA's Consultation Paper offers limited clarity on whether the revised delay mechanism under Article 17(4) is intended to encompass such situations going forward. It is not clear whether this omission reflects a deliberate policy choice or a gap in the legislative drafting. However, the forthcoming update to ESMA guidelines on delay of disclosure will be critical in clarifying whether one-off events fall within the scope of the delay mechanism. As mentioned above, the scope of situations where the delay mechanism will be relevant is significantly narrower compared to today, as the disclosure of inside information regarding protracted processes will no longer require delays. However, there are practical scenarios where the consequences of the amendments to Article 17(4) of MAR could benefit from clarification. For instance, could it be argued that, going forward, the sudden resignation of a CEO without any prior dialogue with the issuer might constitute information that can be delayed? This would allow time to establish an interim leadership plan prior to disclosure, as the test will no longer focus on whether the information is misleading but on whether it contradicts previous communication.
It must be expected that the current guidance and practice from the Danish Supervisory Authority regarding delay of disclosure of inside information likely will need to be revised as a consequence of the amendments to the disclosure regime under MAR and the expected outcome of ESMA's technical advice in the Consultation Paper.
Issuers is encouraged to closely monitor the development of these delegated acts, assess their communication practices, and prepare for their potential impact on disclosure practices. If you have any questions or require assistance navigating these changes, please do not hesitate to reach out to our team of experts or your usual Plesner contact.
Next steps
When finalising its technical advice to the European Commission, ESMA will consider all feedback received in relation to this Consultation Paper by 13 of February 2025. ESMA has settled for an eight-week consultation period to be able to meet the deadline for delivering its technical advice, set on 30 April 2025.
A Final Report containing a summary of all consultation responses and a final version of ESMA's technical advice is expected to be delivered to the European Commission and published on ESMA's website in Q2 2025.
For further information, reference is made to ESMA's official Consultation Paper