Inside Information and Issuer Disclosure Obligations: The Long Way to Convergence between the European Union and the United States

in Iris H.-Y. Chiu and Iain G. MacNeil (eds), Research Handbook on Global Capital Markets Law, Edward Elgar Publishing Ltd, 2023.

Bocconi Legal Studies Research Paper No. 4376881

23 Pages Posted: 7 Mar 2023 Last revised: 20 Feb 2024

See all articles by Chiara Mosca

Chiara Mosca

Bocconi University - Department of Law

Chiara Picciau

University of Brescia - Department of Law

Date Written: July 23, 2022

Abstract

Significant differences persist among the European Union and the United States in the regulation of issuers’ disclosure obligations on material corporate information. Lawmakers on either side of the Atlantic strive to pursue the same goals of market transparency and efficiency. However, in the European Union issuers are under a duty to disclose as soon as possible all precise, price-sensitive information that directly concerns them (so-called ‘inside information’), while in the United States the disclosure of corporate information is mostly periodic or triggered by the occurrence of specific events or changes.

By comparing the EU and the US disclosure regimes, this chapter questions whether broad, principle-based continuous disclosure obligations, such as those introduced in the European Union, actually represent the most balanced approach to achieve market transparency and efficiency. It argues that the European approach results, in practice, in entrusting issuers with the daunting task of selecting which corporate information must be made public to satisfy these ambitious goals, placing on them a significant compliance and organizational burden that might be particularly difficult to meet for SME issuers, potentially discouraging these companies from accessing the capital markets.

Keywords: inside information, material information, continuous disclosure, market abuse regulation, market transparency, organizational burden, SME issuers

JEL Classification: K2, K22, G1, G14, G18

Suggested Citation

Mosca, Chiara and Picciau, Chiara, Inside Information and Issuer Disclosure Obligations: The Long Way to Convergence between the European Union and the United States (July 23, 2022). in Iris H.-Y. Chiu and Iain G. MacNeil (eds), Research Handbook on Global Capital Markets Law, Edward Elgar Publishing Ltd, 2023., Bocconi Legal Studies Research Paper No. 4376881, Available at SSRN: https://ssrn.com/abstract=4376881 or http://dx.doi.org/10.2139/ssrn.4376881

Chiara Mosca

Bocconi University - Department of Law ( email )

Via Roentgen, 1
Milan, Milan 20136
Italy

Chiara Picciau (Contact Author)

University of Brescia - Department of Law ( email )

via San Faustino 41
Brescia, BS 25121
Italy

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