5.9 Listing and the Information Management Regime 2055.9.4 Periodic and Ongoing Disclosure Obligations
Other disclosure requirements applicable to listed companies range from the
periodic disclosure of financial information to ongoing disclosure obligations and
the duty to disclose matters relating to corporate governance. This is a legal
growth area.
Traditionally, disclosure has been the main principle of UK and US company
and securities markets laws. Nowadays, extensive disclosure rules are not limited
to the UK and US markets. There is extensive harmonisation of listed companies’
disclosure requirements in the EU.
The Financial Services Action Plan contained measures to establish a common
financial disclosure regime across the EU for issuers of listed securities (the “dis-
closure and transparency agenda”). Many of those measures were necessary be-
cause of the need to react to the extraterritorial scope of the Sarbanes-Oxley Act.
Periodic disclosure obligations. Listed companies must comply with a strict
periodic disclosure regime that is based on EU directives and national law (see
Volume I).
In addition to financial information, a listed company must disclose information
about risk and corporate governance aspects on a regular basis (see below).
Ongoing disclosure obligations. Ad-hoc disclosure is regulated in particular by
the Market Abuse Directive and the Transparency Directive. The Listing Directive
contains further rules on ad-hoc disclosure. In addition, several directives deal
with the disclosure of information relating to major transactions.
Any information that affects share price: the Market Abuse Directive. Disclo-
sure is a traditional anti-insider dealing technique. Typical disclosure obligations
which can mitigate the risk of insider dealing include the obligation to disclose
managers’ dealings,^329 the obligation to disclose beneficial ownership to shares,^330
and the obligation to disclose inside information.^331 The Directive on market abuse
therefore not only prohibits abuse but also requires issuers to disclose information.
There is a general obligation to disclose all inside information to the public.^332
Inside information means “information of a precise nature which has not been
made public, relating, directly or indirectly, to one or more issuers of financial in-
struments or to one or more financial instruments and which, if it were made pub-
lic, would be likely to have a significant effect on the prices of those financial in-
struments or on the price of related derivative financial instruments”.^333
Information is deemed to be of a precise nature if it “indicates a set of circum-
stances which exists or may reasonably be expected to come into existence or an
(^329) Article 6(4) of Directive 2003/6/EC (Directive on market abuse) and Article 6 of Direc-
tive 2004/72/EC.
(^330) Article 9(1) of Directive 2004/109/EC (Transparency Directive).
(^331) Davies PL, Gower and Davies’ Principles of Modern Company Law, Seventh Edition.
Sweet & Maxwell, London (2003) pp 752–753.
(^332) Article 6(1) of Directive 2003/6/EC (Directive on market abuse). The Listing Directive
lays down a similar obligation. See Article 68(1) of Directive 2001/34/EC (Listing Di-
rective).
(^333) Article 1(1) of Directive 2003/6/EC (Directive on market abuse).