On the 13th March 2020, the Malta Financial Services Authority ("MFSA") issued a circular addressed to listed entities whose financial instruments are admitted to trading on a trading venue and which relates to the outbreak of COVID-19 (the "Circular").
Public Disclosure of Inside Information
By means of a statement issued on 11th March 2020, the European Securities and Markets Authority ("ESMA") recommended issuers to disclose immediately any relevant significant information concerning the impact of Covid-19 on their fundamentals, prospects or financial situation in terms of their transparency obligations under Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse ("MAR").
In this regard, the MFSA reminds issuers of their obligations under MAR, particularly, their obligation to inform the public immediately of any inside information which directly or indirectly concerns the issuer, in terms of Article 17(1) of MAR. Issuers shall assess the consequences of the current situation and decide whether disclosure of information is warranted. In this regard, one should note that in terms of Article 7 of MAR, inside information refers to information;
of a precise nature;
that has not been made public;
relating directly or indirectly to one or more issuers and/or financial instruments; and
if it were made public, it would be likely to have a significant effect on the prices of those financial instruments.
If the issuer is aware of a significant impact that the Covid-19 pandemic might have on inter alia its operations or performance, it must be made public immediately and in a way which enables fast access, is complete and can be properly and timely assessed by the public.
The MFSA also notes that since there are constant developments relating to Covid-19, issuer should periodically reassess the impact of current events and if required, they should communicate any further updates. It is also important to note that any assessments, reasoning and justifications as to why information was or was not considered to amount to inside information, should be kept in writing and should be made available to the MFSA if and when requested.
Delayed Disclosure of Inside Information
Issuers have the possibility to delay such disclosure provided the conditions contained in Article 17(4) or Article 17(5) of MAR are met. If an entity is opting for a delay in disclosure in terms of Article 17(5), the issuer should seek the MFSA's consent or otherwise, prior to opting for such delay. Furthermore, where disclosure has been delayed in terms of the foregoing articles and confidentiality of that inside information is no longer ensured, the inside information should be disclosed to the public as soon as possible.In this regard, issuers should also refer to Commission Implementing Regulation (EU) 2016/1055 laying down implementing technical standards with regard to the technical means for appropriate public disclosure of inside information and for delaying the public disclosure of inside information.
Unlawful Disclosure of Inside Information and Insider Dealing
In view of the current circumstances, listed entities should ensure the prevention of unlawful disclosure of inside information and/or insider dealing and should advise their employees about the prohibitions contained in Article 14 of MAR and which include that a person shall not:
engage or attempt to engage in insider dealing;
recommend that another person engage in insider dealing or induce another person to engage in insider dealing; or
unlawfully disclose inside information.
Attendance to Upcoming Annual General Meetings
The MFSA encourages entities to consider alternative means to conduct Annual General Meetings, such as:
Meetings may be held via website and shareholders can cast their vote without being physically present at the actual general meeting as allowed in terms of the Listing Rules;
Remote voting can be carried out either through proxy, correspondence, or by internet through secured voting platforms provided by the issuer. If the votes are cast electronically, an electronic confirmation of receipt of the votes shall be sent to the person who casts the vote.
Feel free to contact us if you require any further information in relation to listed entities.