Releases containing inside information – give attention to the title of the release
The Financial Supervisory Authority (FIN-FSA) wishes to draw issuers’ attention to releases that disclose inside information. Such a release must clearly state that the release contains inside information. In addition, the release must identify which information in the release is inside information. This also applies to inside information disclosed in connection with a regular financial report, if the issuer discloses inside information in connection with the financial report and not in a separate release. This article provides guidance on how inside information can be clearly identified in a release. Inside information to be disclosed in connection with a financial report is used as an example case.
Presentation of inside information in a release
Releases containing inside information must always state that the release in question contains inside information1. This applies to all releases that contain inside information. According to the main rule, the message category of the release should be inside information and Inside information should be entered in the basic information of the stock exchange release always when the publication of inside information is involved.2 In that case, the investor understands that the information published in the release is, in the issuer’s assessment, inside information. If inside information is not published in its own separate release, but in connection with a release in which the Inside information message category and basic information cannot be used, the inclusion of inside information in the release must be clearly identified in another way.
The FIN-FSA has found that releases on financial reports do not always include a separate mention of inside information that may be contained in them. According to current guidance, the basic information of a financial report, such as, for example, half-year report, should be marked as the basic information of the releases on financial reports. The above-mentioned aspects have, in practice, led to a situation where inside information has been disclosed in the form of a stock exchange release that did not contain an indication of the disclosure of inside information. A similar situation may also arise in situations where a different message category than Inside information is used, such as, for example, in public takeover bids or changes in company management.
The FIN-FSA urges issuers to pay attention to compliance with Article 2(1)(b)(i) of Commission Implementing Regulation (EU) 2016/1055. The FIN-FSA considers it a recommended practice that issuers in the future add the word inside information to the title of their releases if they contain inside information. This applies to both releases published in the Inside information message category and releases published in other message categories. The recommended course of action should therefore also be taken into account in the titling of the release on financial reports mentioned here as an example, if the release discloses inside information. Such inside information included in a financial report may concern, for example, a significant write-down3. It is also recommended that the title of the release identify what the inside information relates to, so that it is not drowned out by the other information contained in the release4. If this practice were observed, it would be possible to view in the news stream that the issuer has published inside information and what the inside information concerns. Inside information must be described in the financial report and, if the financial report is published as an attachment to a stock exchange release, also in the said stock exchange release. In this case, however, the basic information of the financial report in question, such as half-year report, should be entered in the basic information of the release concerning the financial report. The financial report is submitted to the OAM (central storage facility for regulated information) in the appropriate message category, for example the Half-year report message category, not the Inside information message category.
In this context, the FIN-FSA also reminds issuers that the title of a release containing a profit warning should clearly indicate the content of the release and whether a deterioration or improvement of a previously announced future outlook is involved. The release should also repeat the outlook previously given to the market.
Including all of the above-mentioned information in the title of a release concerning a financial report may result in very long titles, which is why the FIN-FSA underlines its recommendation that inside information always be published in its own separate release5. The obligation to publish inside information as soon as possible limits the possibility of including inside information in connection with a financial report in a situation where MAR mandate that the publication of inside information cannot be delayed.
For further information, please contact:
Rickard Sandell, Market Supervisor, rickard.sandell(at)fiva.fi, tel. +358 9 183 5353
1 Commission Implementing Regulation (EU) 2016/1055, Article 2(1)(b)(i).
2 Market Newsletter 1/2019.
3 The FIN-FSA has previously instructed issuers, in relation to financial reports and profit warnings, that when financial information is sufficiently credible and accurate, an issuer should assess whether the financial report contains inside information, and whether potential inside information is of a kind that should be publicly disclosed as a profit warning as soon as possible. If a profit warning is not involved and the conditions for delayed disclosure are met, the issuer shall establish an inside project (Questions and answers (Q&A) - Disclosure of inside information and delayed disclosure (MAR Article 17).
4 An example of the title of a financial report release to which information about the inside information included in the release has been added: X Plc’s interim report 1.1.-31.3.2022. X’s net sales increased by Y per cent, operating profit at the previous year’s level. Inside information: X Plc writes down a total of EUR X million in trade receivables.
5 Please see article "Future outlooks, changes in outlook and their disclosure" included in this market newsletter.