The coronavirus vs disclosure duties

The coronavirus pandemic has been wreaking havoc on capital markets all around the world, Europe included. The European Securities and Market Authority (ESMA), acting in consultation with competent bodies at the national level (including the Polish Financial Supervision Authority), has now issued guidelines intended to help market participants weather the coronavirus storm.

Specifically, the ESMA guidelines address discharge of disclosure and information duties by securities issuers, pointing out:

The necessity of including information about actual and potential impact of the coronavirus crisis in the annual report for 2019 or, if the latter has already been definitively finalised, in current statements;
The duty of providing detailed information about the pandemic’s impact on an issuer’s basic financial parameters, outlook and/or standing in the context of performing information duties under the Market Abuse Regulation, also as regards promptly reporting any such events in compliance with MAR’s art. 17.

Apart from that, financial market players should be prepared to implement their emergency plans and contingency measures so as to ensure continuity and stability of operations in line with applicable laws. Asset managers are obligated to continue abiding by the risk management rules.

While these various guidelines are not binding in character, they should be heeded; the European authorities have made it clear that, in the future, they will use the instruments at their disposal to ensure due operation of the markets, financial stability, and protection for investors. Moreover, here in Poland, the Financial Supervision Authority is likely to enforce compliance with instructions issued by ESMA.