Say When: When Must an Issuer Disclose Inside Information?
31 Pages Posted: 16 Jun 2016 Last revised: 11 Oct 2016
Date Written: September 19, 2016
One of the most important provisions for ensuring effective securities markets is the mandated, continuous disclosure of non-public material information (inside information). Yet this disclosure obligation is also onerous for issuers, involving high compliance costs and subjecting them to public scrutiny that private companies avoid. In EU law, the concept of inside information has been used in two different but related measures: to prevent insider dealing and to mandate public disclosure. Consequently, how inside information is defined matters significantly to both measures. This paper tries to define what constitutes inside information and to answer the question of when an issuer must disclose such information according to the Market Abuse Regulation that is effective from 3 July 2016. It does so by analysing the recent cases of Gelt and Lafonta adjudicated by the European Court of Justice of the EU and by examining the negotiation of the Market Abuse Regulation.
Keywords: Disclosure, inside information
JEL Classification: K22
Suggested Citation: Suggested Citation