5.1 Disclosure: Continuing Disclosure Os, II Flashcards
Two conditions before being able to rely on protecting legit interests exemption
Delay will not mislead public and issuer can ensure confidentiality
Under what part of 91 FSMA can FCA censure I/D for breaching LRs
91(3)
Up or down (price, CASE?)
Lafonta
What kind of info has to be disclosed via RIS - defined term
Regulated Info
89/90 FSA apply when
False/misleading statement/impression
Under what part of FSMA does issuer specifically have powers to deal w/ breach of LRs and DTRs
91 FSMA
Where are FCA’s sanction powers for breach of MAR
123 FSMA
Where is inside info defined
7(1)(a) MAR
Two cases on definition of ‘precise’ II
Lafonta and Ian Hannah
Where are the basic content requirements for an insider list
18(3)
Where are three exceptions to O to disclose II immediately
17(4) and (5) MAR + DTR 2.2.9
2/3 Fraud Act apply when
Dishonestly failing to disclose info w/ intention to either cause loss or make gain
To what company must disclosed Regulated Info be forwarded to
Morningstar plc
Provisions on cancelling/suspending listing (two different statutes/guidance)
LR 5.1 & 5.2 and 89L
What is ‘precise’ II
Circumstance or event where info is sufficiently specific to draw conclusion on price of shares
Example of legit interest in Recital 50 MAR
Ongoing negotiations
When finally disclosed after delaying w/ exception under 17(4) or (5), what must issuer do
Notify FCA and explain how conditions met
When does selective disclosure to 3rd NOT have to be simultaneously disclosed to public
If 3rd owes duty of confidentiality
Three examples of selective disclosures
Market sounding, to advisers and to lenders
Provision requiring disclosure of II if sufficiently accurate rumour
17(7)
What case said ‘reasonable expectation’ of event/circumstance for definition of ‘precise II’ just requires realistic prospect of either happening
Ian Hannam
Provision requiring issuer to take all reasonable steps to ensure those on insider list acknowledge in writing duties and possible sanctions
18(2) MAR
When must issuer also do when resolutions for special business passed
Send 2 copies to FCA ASAP (9.6.2R)
Under what provisions can penalty be imposed by FCA on issuer and/or person who breaches DTRs
91(1B), (2), (2A) and (2B)
What provision requires issuer to draw up list of all those w/ access to II
Article 18(1) MAR
How can FCA enforce breach of LRs
91 FSMA, or cancel/suspend listing
What sanctions is FCA most likely to impose for breach of MAR
Penalty and/or public censure and/or require C to make corrective statement
Three exceptions to O to disclose II immediately
Unexpected + significant events, protect legit interests and risk to financial stability of issuer/inancial system
Where are factors that issuers may consider to work out of II will have ‘significant effect’ on price of shares
DTR 2.2.5G
What factors may issuers consider to see if info will have ‘significant effect’ on price of shares
Issuer’s size and fact that investor wants to maximise economic self-interest
What provision shows that ‘published info’ for 90A refers to RIS announcements
Schedule 10A para 2
What provision gives info to be contained in a holding announcement
2.2.9(2)G
How long do RIS disclosures on a website have to be kept up if relating to inside info
5 years
Who must continuously monitor if announcement on inside info required
D
How to test if II will have ‘significant effect’ on price of shares
Reasonable investor test - would it be considered as part of investment decision?
How long do RIS disclosures on a website have to be kept up if relating to financial reports
10 years
What must leak announcement state
Extent to which leak is accurate
Provision on how long to keep financial reports on website
DTR 4.1.4R
What should issuer do if delaying disclosure of II through exception, in terms of paperwork
Keep detailed records of decision-making process
What provision requires FCA to consider circumstances before imposing sanction under 123 FSMA
Article 31 MAR
Who determines if issuer has a legit interest in delaying disclosure of II
Issuer - 2.5.5G
What powers does FCA have under 122A - I FSMA
Enforcement and investigatory powers
Under what provision can FCA apply to court for order suspending voting rights of person who contravened DTR 5.1.2R (major shareholdings)
89NA FSMA
Is info II if it is unpublished? Provision
Not necessarily (2.2.10G)
Particular LP for disclosure Os
LP1 - take reasonable steps to have adequate procedures to comply w/ Os
Example of powers FCA has under 91 FSMA
Censure or penalty
What two provisions become relevant if have published info which is misleading or omits key info
90A FSMA + 89/90 FSA
Ian Hannam key
Realistic
Where is a non-exhaustive list of legit interests set out
Recital 50 MAR
If disclosure of II is being withheld, what must issuers do + provision
Prepare holding announcement in case leaked (2.6.3G)
What provision states that knowledge a rumour is false does not = II
DTR 2.7.3G
How is inside info defined in 7(1)(a) MAR
Precise info which is not public, relating (in)directly to issuer and if made public, would likely have significant effect on share price
What part of Schedule 10A defines ‘dishonestly’ for the purpose of para 5(2)
Para 6
Under what part of 91 FSMA can FCA charge I/D w/ unlimited fine for breaching LRs
91(1)
What case said no requirement that conclusion is as to price going up or down for info to be ‘precise’
Lafonta
When does FCA use powers under 122A - I and 123 FSMA
For breach of MAR
Where must issuers publish disclosures of inside info + financial reports
On public website
What defines ‘precise’ for 7(1)(a) MAR
7(2) and (3)
What principles do all listed Cs have to comply with
Listing Principles
When is there no liability under 90A (bc double liability)
If liable under 90 for prospectus (para 4)
Where is the exception to disclosing II immediately for unexpected + significant events
2.2.9(2)G
Who is best placed to decide if info is II and provision
Issuer - DTR 2.2.7G
Example of sanctions under 123 FSMA
Penalties or public censure
What guidance shows delays to disclosure of II are the exception
ESMA Guidance para 52
Particular PLP for disclosure Os
PLP 6 - communicate info to (potential) Ms to avoid creating/continuing false market
Realistic (precise, CASE)
Ian Hannam
What defines ‘significant effect’ for definition of II
7(4)
What should be prepared in the case of selective disclosure
Holding announcement in case leaked
When will a rumour about info lead to disclosure of II
If explicitly relates to II and sufficiently accurate to mean confidentiality not assured
Lafonta key
Up or down
What provision do you have to comply w/ when disclosing Regulated Info, re: content
DTR 6.3
Where is the general O to disclose inside info
Article 17(1) MAR
What must investor prove for claim under 90A FSMA
Loss and either misleading, omission, or issuer acted dishonesty in delaying publication
What must issuer do in regard to the duties of those on the insider list
Take all reasonable steps to ensure those on list acknowledge in writing duties and possible sanctions
Power to suspend/prohibit trading of I for breach of DTR
89L FSMA
Two provisions which permit selective disclosure if 3rd under confidentiality agreement
17(8) MAR + DTR 2.5.7G
What provision shows FCA can enforce MAR
Article 23
Conditions that must be satisfied before issuer can rely on risk to financial stability exception for delaying disclosure of II
In public interest, can ensure confidentiality and FCA has consented
What is selective disclosure
Disclosing to 3rd in course of employment
What provision requires Ds to continuously monitor if II announcement required
DTR 2.2.8G
What principles do premium listed Cs have to comply with
Premium Listing Principles
Two other offences which C may be liable for if breaches Article 17 MAR
2/3 Fraud Act and 89/90 FSA
What must issuer also do when circulars/notice/reports to which LRs apply are issued
Send 2 copies to FCA as well (9.6.1R)
Provision on how long to keep disclosures of inside info on website for
17(1) MAR
Power of censure of I for not complying w/ DTR
89K FSMA
How long must an insider list be kept
At least 5 years (18(5))
What does ESMA advise about staff + inside info
Appoint a person to decide if II has arisen and if can delay
What happens if there is a false rumour about II?
No need to disclose - knowledge rumour is false does not = II
When must inside info be disclosed under Article 17(1) MAR
Immediately, unless exception applies
How is Regulated Info disclose
via RIS
Which part of Schedule 10A FSMA is most likely to be relevant if breaching Article 17 MAR (disclose II)
Para 5(2) - dishonestly delaying
Three general categories of liability for breaching Article 17 MAR
Specifically for breaching MAR (122 - 123 FSMA), for breaching LRs (91 FSMA + LR 5.1 & 5.2), and for delaying publication (90A FSMA –> para 5(2) Schedule 10A)
What additional liability may breach of Article 17 MAR lead to, beyond breach of MAR, LRs or delaying pub (e.g. 90A FSMA)
Could lead to liability under 89/90 FSA and/or 2/3 Fraud Act
