Principles of secondary market disclosure

The Market Abuse Regulation (MAR) is a key pillar of EU financial markets, designed to provide secondary markets with a high level of transparency. MAR establishes, through a broad definition, what constitutes insider information and requires issuers to disclose, as soon as possible, any corporate inside information. After nearly a decade, the application of the MAR revealed divergent interpretations across Member States and high compliance costs for issuers. In response, the European Commission proposed, as part of the Listing Act, amendments to certain original provisions of MAR. Aiming to enhance legal certainty and reduce regulatory burdens, the Listing Act identifies, in more detail, which information could be disseminated and when, addressing the excessive vagueness surrounding the notion of inside information. It removes the original MAR provision requiring issuers to disclose protracted processes or intermediate steps of certain transactions or operations. The goal is to reduce the risk of premature disclosures that could mislead investors and negatively impact secondary markets, while promoting convergent interpretation by national regulators. With the Listing Act, the notion of inside information became twofold since the MAR will also continue to adopt the original notion to prevent insider trading and preserve market integrity. The open question is whether these amendments will contribute to harmonize issuers’ disclosure, interpretations, and practices across Europe, leading to more integrated and strong capital markets.