Disclosure of price-sensitive information: What effect do “intermediate steps” have on the statutory disclosure date?

On the basis of the European Court’s judgment of 28 June 2012, C-19/11, Daimler AG, the article analyses the effect of a series of intermediate steps leading up to a price-sensitive event which is subject to public disclosure on the date on which that duty is triggered. The article concludes that such intermediate steps have a greater effect than has previously been generally assumed, and that in any event, following a concrete assessment, intermediate steps over a prolonged period may have the effect of bringing the date of disclosure forward. The article includes recommendations to listed companies on how to handle the Daimler judgment’s consequences with regard to “intermediate steps” in practical terms. In light of the Court’s relatively restrictive interpretation, a listed company in a similar situation really only has three options: (1) Delay: The company can delay disclosure of the inside information “on its own responsibility” in order not to damage the company’s legitimate interests – cf. on this Article 6(2) of Directive 2003/6/EC, which provides that “An issuer may, on his own responsibility, delay the public disclosure of inside information … so as not to prejudice his legitimate interests, provided that such omission would not be likely to mislead the public…” It is a condition for delaying disclosure that doing so will not mislead the public, and the issuer can ensure that the information remains confidential. Member states can, but are not required to, demand (and so far Denmark for one has not done so) that an issuer must immediately advise the competent authority of its decision to delay disclosure of inside information – cf. Article 6(2), second sentence of Directive 2003/6/EC. (2) Acceleration: The company can compress and minimise the number of items in the chain of events with the effect that the inside information available is so specific that it must be disclosed. (3) Delay + acceleration: The company can combine a delay as noted with acceleration as noted. This combination is generally the solution to be recommended in practical terms.