Disclosure of Inside Information

Abstract

The disclosure of inside information is a core component of EU capital market regulation. It underpins the market abuse regime, providing information to investors, and robbing it of its “inside” quality. Different regimes tackle the issue of inside information disclosure in distinct ways. The EU regime of continuous disclosure stands in sharp contrast to the approach adopted in the US and this paper considers the pros and cons of the EU’s approach. This paper argues that the EU provisions are preferable, and are more likely to promote market efficiency, but the EU regime also creates potential dangers and disadvantages for companies who are the subject of the disclosure obligations. Sufficient flexibility is therefore needed to capture the benefits of continuous disclosure without imposing undue burdens on issuers in the process.

Keywords: disclosure, inside information, market abuse, EU financial markets, Market Abuse Regulation

JEL Classification: K22