29 May 2024
The European Securities and Markets Authority (ESMA) issued today a statement reminding issuers about the applicable legislative framework to “pre-close calls” and encouraging them to follow good practices when engaging in such calls, with the goal of contributing to maintain fair, orderly, and effective markets.
Following some recent news in the media suggesting a connection between episodes of high volatility in share prices and “pre-close calls”, ESMA reminds issuers that any disclosure of inside information should only take place in accordance with the Market Abuse Regulation (MAR). Consequently, issuers should only share non-inside information during these “pre-close calls”.
To address potential concerns related to pre-close calls, ESMA recommends following several good practices, including:
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Prior to a “pre-close call”, carrying out an assessment of the information intended to disclose, making sure that it is not inside information;
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Informing the public about the upcoming “pre-close calls” on the issuer’s website, highlighting the relevant details (date, place, topics and participants);
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Making the material and documents used simultaneously available on the issuer’s website.
ESMA also notes that the analysis of specific episodes and identification of potential breaches of MAR is for national competent authorities.
Background
Pre-close calls are communication sessions between an issuer and analysts who generate research, forecasts and recommendations related to the issuer’s financial instruments. These sessions occur just before the periods preceding an interim or year-end financial report, during which issuers avoid providing additional information or updates. The outcomes of pre-close calls can influence market expectations and instrument prices.
Source – ESMA reminds on rules for sharing information during pre-close calls