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08 December 2016

MAR – FCA consults on DTR 2.5 changes (delay in disclosure)

The ESMA Guidelines on delay in disclosure of inside information apply from 20 December 2016. The FCA has notified ESMA of its intention to comply with the Guidelines (and also with the Guidelines on market soundings (link to 11 November 2016 MAR update). To be consistent with the Guidelines on delay and disclosure, the FCA needs to amend its disclosure guidance in DTR 2.5. The proposed amendments are set out in CP16/38.

In amending DTR 2.5, the FCA is proposing to follow its previous approach when implementing MAR by deleting FCA Handbook material that conflicts with or duplicates the Guidelines and cross-referring where appropriate.

The proposed changes to DTR 2.5 would:

  • Add a general signpost to the ESMA Guidelines at DTR 2.5.1BG.

  • Delete DTR 2.5.3G (non-exhaustive circumstances to which legitimate interests to delay disclosure may relate) as it directly overlaps with the Guidelines.

  • Make minor amendments to DTR 2.5.4G (the scope and application of the ability to delay disclosure) to remove the reference to DTR 2.5.3G and instead cross-refer to the Guidelines.

  • Delete the third sentence in DTR 2.5.5G as this is considered to be incompatible with the Guidelines but retain the first two sentences (impending developments that could be jeopardised by premature disclosure) as there is no equivalent in the Guidelines. The third sentence suggests that there are unlikely to be circumstances beyond impending developments or those referred in the Guidelines where delay would be justified but the Guidelines, being a non-exhaustive list, leave open the possibility of the list being amended in the future.

  • Add a definition of the ESMA Guidelines to the FCA Handbook Glossary.

  • The FCA says that the proposed changes are not intended to extend the scope for issuer non-disclosure. It is not proposing any changes to the section titled “selective disclosure” (DTR 2.5.6A to DTR 2.5.9G) on the basis that these provisions are not impacted by the Guidelines. The consultation closes on 6 January 2017.