A FTSE250 Company Secretary writes...
“How is everyone dealing with project insider lists under MAR? The issue we have is that many of our senior leadership team members are informed of what could potentially be inside information ahead of our results announcement. I’m sure other organisations have the same issue and wondered how they were tackling this? It seems a lot of work to add c. 100 personnel to a project insider list and then remove them immediately following the results announcement and to have to repeat this every time.”
I’m not sure that companies are proving too conservative here. And it’s not quite as black and white as Small Cap suggests. Rather there is uncertainty as companies wait for standard market practice to emerge: hence the question.
Encouragingly, recent interim results announcements suggest that common sense seems to be prevailing with no reference to their including inside information. The position has been unclear because not all law firms or brokers agree on the approach to be taken ahead of results announcements; also the FCA announcement of 25 May, now helpfully superseded by ESMA which refers to all “key”, rather than “inside” information needing to be included in preliminary announcements in order to end the MAR closed period.
Following discussion with our corporate broker, we are taking the approach adopted by the FTSE 250 company (11 August) ahead of our forthcoming results release, setting up a project list of people holding restricted information which is confidential, but not “inside” information. So no need for onerous data gathering requirements, just the old spreadsheet. Also we still apply the old Model Code dealing restrictions from the period end until announcement (not just 30 days).
The position as regards whether information is “inside” will need to be assessed every half year and also during the preparation of trading updates and the necessary procedures applied accordingly.
there seems to be a tendency for companies to be far too conservative about these issues. I would make a few points:
1) as previous commentator mentioned, annual and interim account preparation within trading expectations isn’t inside information;
2) a decision is needed as to whether or not the circumstances create inside information or not. if not, there is no need for a list. if there is then announce, or create a list and deal with the requirements around delay in announcement.
3) companies have an obligation to deny inside information to employees except where needed for the purpose of their job.
part of the issue seems to be the conflation of restricted dealing lists under the old Model Code, and insider lists under MAR.
There’s been a lot of debate around this point and the general view seems to be that results that are within market expectations are not considered ‘inside information’. Results are only considered inside information if they are outside of range or contain new news, in which case that information should be released without delay (e.g. a profits warning) or can be delayed if that delay is legitimate under MAR – this would require an insider list to be kept and notification to the FCA following the release of that information. This is the approach that we will be following.