FCA to confirm that list of times when disclosure can be delayed is not exhaustive

The Financial Conduct Authority has published a consultation in which it confirms that it will adopt in full the European Securities and Markets Authority's guidelines issued under the Market Abuse Regulation and proposes changes to its Disclosure Guidance in DTR 2 to bring them in line with ESMA's guidelines. The proposed changes include removing the FCA's stance that delaying disclosure of inside information is only likely to be allowed where there is an ongoing negotiation that would be jeopardised by early disclosure, as this conflicts with ESMA's non-exhaustive list of situations when delay might be permissible.


Under Article 17 MAR, an issuer must announce inside information as soon as possible unless it can satisfy three criteria: that immediate disclosure would prejudice the issuer's legitimate interests, that delay is not likely to mislead the public and that confidentiality will be preserved. ESMA issued guidelines under MAR which include a non-exhaustive list of situations where an issuer might delay to protect its legitimate interests, as well as guidance on misleading the public.

Conflict between ESMA guidelines and DTR 2.5.5G

The FCA's Disclosure Guidance currently contains a statement that, other than in relation to ongoing negotiations, there are unlikely to be other situations in which delay might be possible to protect the issuer's legitimate interests. The FCA consulted previously on removing this statement, but deferred its response until ESMA's guidelines were published. It has now published a new consultation in which it proposes again to delete this statement and confirms that it intends to adopt the ESMA guidelines in full.

This proposal is likely to be welcomed by issuers, as it removes the current uncertainty about whether they can delay disclosure in circumstances other than ongoing negotiations. It will allow issuers to delay in the other circumstances specified in the ESMA guidelines, and it potentially opens the door to delaying disclosure in circumstances not set out in the guidelines, as the list is non-exhaustive. However, there will always be a risk when delaying disclosure in circumstances not set out in the guidelines that the FCA might disagree that the delay was permissible.

Other proposed changes

The consultation paper also proposed other minor changes to DTR 2 to bring it in line with the ESMA guidelines and confirms that the FCA will adopt ESMA's other guidelines for market soundings recipients.

The deadline for responses is 6 January 2017.

Click here for the FCA's consultation paper CP 16/38. Click here for ESMA's guidelines on delaying disclosure of inside information.