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DTR 2.2 Disclosure of inside information

Requirement to disclose inside information

DTR 2.2.1R

[Note: see DTR 6.3.2R, regarding the disclosure of inside information]1

DTR 2.2.1AEU

1[article 17(1) of the Market Abuse Regulation]

DTR 2.2.2R

[deleted]1

Identifying inside information

DTR 2.2.3G

Information is inside information if each of the criteria in the definition of inside information is met.

DTR 2.2.4G

  1. (1)

    [Note: article 7(4) of the Market Abuse Regulation]1

  2. (2)

    In determining whether information would be likely to have a significant effect on the price of financial instruments, an issuer should be mindful that there is no figure (percentage change or otherwise) that can be set for any issuer when determining what constitutes a significant effect on the price of the financial instruments as this will vary from issuer to issuer.

DTR 2.2.5G

An issuer may wish to take account of the following factors when considering whether the information in question would be likely to be used by a reasonable investor as part of the basis of his investment decisions:1

  1. (1)

    1the significance of the information in question will vary widely from issuer to issuer, depending on a variety of factors such as the issuer's size, recent developments and the market sentiment about the issuer and the sector in which it operates; and

  2. (2)

    the likelihood1 that a reasonable investor will make investment decisions relating to the relevant financial instrument to maximise his economic self interest.

DTR 2.2.6G

It is not possible to prescribe how the reasonable investor test will apply in all possible situations. Any assessment may need to1 take into consideration the anticipated impact of the information in light of the totality of the issuer's activities, the reliability of the source of the information and other market variables likely to affect the relevant financial instrument in the given circumstances. However, information which is likely to be considered relevant to a reasonable investor's decision includes information which affects:

  1. (1)

    the assets and liabilities of the issuer;

  2. (2)

    the performance, or the expectation of the performance, of the issuer's business;

  3. (3)

    the financial condition of the issuer;

  4. (4)

    the course of the issuer's business;

  5. (5)

    major new developments in the business of the issuer; or

  6. (6)

    information previously disclosed to the market.1

DTR 2.2.7G

An issuer and its advisers are best placed to make an initial assessment of whether particular information amounts to inside information. The decision as to whether a piece of information is inside information may be finely balanced and the issuer (with the help of its advisers) will need to exercise its judgement.

Note: DTR 2.7 provides additional guidance on dealing with market rumour.

DTR 2.2.8G

The directors of the issuer should carefully and continuously monitor whether changes in the circumstances of the issuer are such that an announcement obligation has arisen under article 17 of the Market Abuse Regulation1.

When to disclose inside information

DTR 2.2.9G
  1. (1)

    [deleted]1

  2. (2)

    If an issuer is faced with an unexpected and significant event, a short delay may be acceptable if it is necessary to clarify the situation. In such situations a holding announcement should be used where an issuer believes that there is a danger of inside information leaking before the facts and their impact can be confirmed. The holding announcement should:

    1. (a)

      detail as much of the subject matter as possible;

    2. (b)

      set out the reasons why a fuller announcement cannot be made; and

    3. (c)

      include an undertaking to announce further details as soon as possible.

  3. (3)

    If an issuer is unable, or unwilling to make a holding announcement it may be appropriate for the trading of its financial instruments to be suspended until the issuer is in a position to make an announcement.

  4. (4)

    An issuer that is in any doubt as to the timing of announcements required under the Market Abuse Regulation1 should consult the FCA at the earliest opportunity.

Communication with third parties

DTR 2.2.10G

The FCA is aware that many issuers provide unpublished information to third parties such as analysts, employees, credit rating agencies, finance providers and major shareholders, often in response to queries from such parties. The fact that information is unpublished does not in itself make it inside information. However, unpublished information which amounts to inside information is only permitted to be disclosed in accordance with the requirements of the Market Abuse Regulation1.