The European Securities and Markets Authority (ESMA) today issued a statement reminding issuers of the legal framework applicable to ‘pre-close calls’ and encouraging them to follow good practice when making such calls, with the aim of contributing to maintaining fair, orderly and efficient markets.
Following some recent media reports suggesting a link between episodes of high volatility in share prices and “pre-closing calls”, ESMA reminds issuers that any disclosure of confidential information should only be made in accordance with the Market Abuse Regulation (MAR). Accordingly, issuers should only share non-inside information during these “pre-closing calls”.
To address potential concerns related to pre-close calls, ESMA recommends following several good practices, including:
- Prior to a “pre-closing call”, conducting an assessment of the information to be disclosed, ensuring that it is not confidential information;
- Inform the public about upcoming ‘pre-calls’ on the publisher’s website, highlighting relevant details (date, venue, topics and participants).
- Also having the materials and documents used on the publisher’s website.
Preliminary calls are communication sessions between the issuer and analysts who create research, forecasts and recommendations related to the issuer’s financial instruments. These meetings are held just before the periods leading up to an interim financial report or a year-end report, during which issuers refrain from providing additional information or updates. The results of pre-close calls can affect market expectations and instrument prices.