Ad hoc disclosure obligations in protracted processes after the EU Listing Act: balancing investor protection and issuer interests

1. Introduction

Article 17(1) of Regulation (EU) No 596/2014 on market abuse (hereinafter ‘MAR’)¹ regulates the obligation to disclose inside information that directly concerns issuers of financial instruments admitted to trading on an EU trading venue or for which a request for admission to trading on a regulated market or a multilateral trading facility (MTF) has been submitted.² By detailing both the conditions and the procedure for disclosure, this provision serves as the single European legal basis for the ad hoc disclosure duty, which is one of the three main pillars of the general transparency requirements in the capital markets.³ This obligation is crucial for the proper functioning of the capital markets and for the decision-making capacity of the involved parties (issuers, investors, and institutions) as it pertains to events that are not yet publicly known but have occurred within the issuer’s operations, potentially affecting the prices of its financial instruments due to their impact on its financial or overall business condition.⁴

However, despite the general importance of this provision, its integration into the broader system of the MAR raises significant doctrinal and practical concerns. These arise mainly from the European legislator’s choice, already under Directive 2003/6/EC (‘MAD’),⁵ to adopt a ‘one-step model’,⁶ which views the possession of inside information as the basis for both the prohibition of insider dealing⁷ and the triggering of issuers’ obligation for immediate (ad hoc) disclosure.⁸ Indeed, the purpose of the ad hoc disclosure obligation is partly distinct from that of the prohibition of insider dealing. The former primarily focuses on maintaining the informational efficiency of the market,⁹ while the latter, beyond economic objectives, serves broader policy goals, namely ensuring the equal treatment of market participants (‘market egalitarianism’).¹⁰ That being the case, the adoption of the one-step model risks broadening issuers’ disclosure obligations, thereby increasing compliance costs without necessarily enhancing price accuracy or improving investment decisions. This risk is particularly evident following the Geltl ruling,¹¹ which expanded the concept of inside information to include intermediate steps in a protracted process (eg a merger) that is intended to bring about certain circumstances or generate a particular event.¹² As a result, intermediate steps in protracted processes also fall within the scope of the ad hoc disclosure duty under Article 17(1), provided they meet the criteria of inside information,¹³ regardless of whether the future circumstances or event to which they are connected ultimately materialise.¹⁴ This implies that issuers may incur significant compliance costs in determining which intermediate steps qualify as inside information and, hence, require disclosure. At the same time, the effectiveness of such disclosure in reducing information asymmetry between issuers and investors may be limited if the information is overly preliminary or incomplete, potentially resulting in suboptimal decisions.¹⁵

Against this backdrop, the European Parliament and the Council have recently adopted Regulation (EU) 2024/2809 (‘Listing Act Regulation’),¹⁶ which, inter alia, narrows the scope of the disclosure obligation under Article 17(1) MAR in the context of protracted processes.¹⁷ The new provision, effective from June 5, 2026,¹⁸ excludes intermediate steps in a protracted process (eg a merger) from the ad hoc disclosure obligation. Instead, issuers will be required to disclose only information related to the specific circumstances or the final event that the protracted process aims to achieve or results in, promptly after these circumstances or event occur (eg once the management has approved the merger agreement and finalized the core elements of the merger).¹⁹ At the same time, to facilitate issuers in determining when disclosure of inside information is required, the Commission is authorized to adopt a delegated act outlining a non-exhaustive list of final circumstances or events in protracted processes that trigger the disclosure obligation and, for each circumstance or event, the moment when it is considered to have occurred.²⁰ These rules seek to enhance legal certainty for both issuers and investors by clarifying the concept of inside information for disclosure purposes as well as the timing of such disclosure.²¹

This study aims to assess whether the targeted amendments to the ad hoc disclosure regime under Article 17 MAR can reduce the regulatory burden on issuers while upholding an adequate level of investor protection and ensuring efficient price formation. Moreover, it explores whether an alternative system, such as that employed in the USA—where ad hoc disclosure is required only for a predefined, exhaustive list of events which qualify as material for disclosure purposes—might be more effective.

With this objective in mind, the study is structured as follows: Section 2 briefly analyses the factors that led to the adoption of the one-step model in the European regulatory framework for market abuse. Section 3 then examines the role and position of Article 17 MAR within the broader system of the Regulation, with particular emphasis on the multiple functions of the ad hoc disclosure duty, especially when contrasted with the objectives of Article 8 MAR regarding the prohibition of insider trading. This analysis is essential for delineating an analytical framework to assess the ability of the recently revised Article 17 MAR to mitigate the adverse effects of the current regime on the disclosure of inside information. In this regard, Section 4 discusses the implications of the one-step model, with particular focus on the condition of ‘specificity’ in the definition of inside information, and provides an overview of the amended Article 17 MAR. Section 5 assesses the potential of the new provision to achieve the desired balance between supporting issuers and protecting investors. It also examines alternative measures to enhance the efficiency of the ad hoc disclosure system, especially the option of limiting the disclosure obligation to a predefined list of events. Finally, Section 6 concludes the study with the formulation of specific findings.

2. The prevalence of the one-step model in the EU market abuse regime

A. The one-step model in Directive 2003/6/EC and its criticism

Prior to the implementation of Directive 2003/6/EC, EU capital markets law adhered to a ‘two-step model’, according to which the information subject to the ad hoc disclosure obligation was explicitly distinguished from the ‘inside information’ that triggered the prohibitions established by the former Directive 89/592/EEC on the prevention of insider dealing.²² More specifically, while the prohibition of insider dealing generally encompassed any sufficiently precise, non-public information that, if disclosed, could have a significant impact on the prices of traded securities (‘inside information’),²³ the issuer’s obligation to disclose such information promptly was only triggered in the case of ‘major new developments’ within its area of activity that could substantially affect the prices of its shares.²⁴ In other words, the concept of inside information was pertinent solely within the framework of preventing actions that could undermine the proper functioning and integrity of the market.²⁵

Departing from this approach, Directive 2003/6/EC restructured the European market abuse regime by explicitly expanding its scope to encompass not only the prohibition of market manipulation²⁶ but also the obligation of ad hoc disclosure.²⁷ The rationale behind this shift was that the prompt and fair disclosure of any inside information directly related to the issuer enhances investor confidence in the integrity of financial markets.²⁸ Additionally, the MAD introduced a single definition of the notion of inside information for the purposes of applying the relevant provisions,²⁹ embodying what is often referred to as the ‘one-step model’.³⁰

This approach, however, had been the subject of considerable criticism, particularly due to the significant divergences observed among Member States in the implementation of the MAD. Notably, the European Securities Markets Expert Group (ESME) highlighted these issues in its evaluation report of the former market abuse framework. In particular, the ESME report identified the decision to adopt a uniform definition of inside information as the foundation for both the prohibition of insider trading and the issuer’s disclosure obligation as a ‘fundamental flaw’ of the Directive.³¹ The report highlighted that the adoption of this uniform definition encountered resistance in several Member States, leading to significant inconsistencies in the interpretation, application, and enforcement of the Directive throughout the EU.³² Indeed, while the one-step model prevailed in central European countries, such as Germany and France, other Member States, including the United Kingdom, Italy, and the Scandinavian countries, continued to prefer the two-step model. These countries either limited the definition of inside information that triggered the disclosure duty to events that had already occurred (eg Denmark),³³ or expanded the scope of inside information that activated the prohibition of market abuse (eg the UK).³⁴ Against this background, the report proposed a return to the twofold notion of inside information that had been in place prior to the application of MAD.³⁵

B. The MAR negotiations and the prevalence of the one-step model

Although the MAD did not include a review clause, its shortcomings prompted its inclusion in the broader capital markets reform programme initiated following the global financial crisis.³⁶ In this context, in October 2011, the European Commission introduced a proposal for a Regulation on market abuse to replace Directive 2003/6/EC.³⁷ Among other provisions, this proposal introduced a distinction between inside information relevant to the prohibition of market abuse and inside information subject to the issuer’s disclosure obligation (‘dual function approach’).³⁸ Specifically, the Commission proposed that the obligation for ad hoc disclosure be restricted to inside information that is both ‘precise’ and likely to affect the price of the issuer’s financial instruments (‘price sensitive’).³⁹ Conversely, the prohibition on market abuse would extend to any information that, even if it did not meet these criteria, could still be deemed ‘relevant’ by a ‘reasonable investor’ when determining the terms for transacting in the relevant financial instrument.⁴⁰

Despite its initial support from the Council, this approach, as is already known, was ultimately rejected, due to two main reasons. First, it would have directly contradicted ESME’s explicit recognition that the existing definition of inside information ‘worked well’ as a criterion for determining when a person in possession of such information should refrain from trading or encouraging others to trade in financial instruments to which it pertains.⁴¹ Second, and more importantly, it faced strong resistance from countries adhering to the one-step model, with Germany taking a leading role.⁴² These countries opposed the introduction of a more lenient definition of inside information for the purposes of disclosure obligations. Instead, they emphasized the need to clarify the relevant definition, particularly in the context of protracted processes,⁴³ in light of the CJEU’s ruling in the Geltl case.⁴⁴

Consequently, Regulation (EU) 596/2014 not only preserved the scope of the ad hoc disclosure duty as provided in Article 6(1) of Directive 2003/6/EC, but also expanded this obligation to encompass intermediate steps in protracted processes, provided they meet the criteria of inside information.⁴⁵ In other words, the one-step model emerged even stronger from the MAR negotiations, confirming the decision to adopt a single definition of inside information for both prohibiting market abuse and triggering issuers’ disclosure obligations. Furthermore, the Regulation’s nature as a legislative act of general and direct applicability significantly curtailed Member States’ flexibility on this matter.

3. The position of the ad hoc disclosure obligation within the MAR framework

A. Purpose and function of the ad hoc disclosure duty (Article 17 MAR)

As mentioned above, the obligation of issuers to immediately disclose any inside information that directly concerns them was first incorporated into the European legal framework on market abuse through Article 6 of Directive 2003/6/EC, while this obligation is now regulated in even greater detail in Article 17 MAR. The rationale behind this legislative choice is reflected in the preamble of the Regulation, which states that: ‘[t]he public disclosure of inside information by an issuer is essential to avoid insider dealing and ensure that investors are not misled’.⁴⁶ In other words, the European legislator deemed that provisions directly aimed at preventing market abuse—such as the duty of confidentiality imposed on persons in possession of inside information⁴⁷ or the prohibition of transactions based on such information⁴⁸—are measures of limited effectiveness. Consequently, they should be supplemented by a broader disclosure duty designed to reduce the availability of inside information and, by extension, prevent its misuse.⁴⁹ A narrow, systematic interpretation of Article 17 MAR, therefore, suggests that the obligation of ad hoc disclosure primarily serves as a complementary measure aimed at limiting insiders’ ability to exploit inside information to the detriment of investors.⁵⁰

Nevertheless, while the role of timely disclosure of inside information in protecting market integrity is undeniable, the purpose of this provision is broader. This broader scope is evident from the fact that, at the European legislative level, the obligation for ad hoc disclosure was established before the prohibition of insider trading.⁵¹ The role of this obligation should, thus, be understood as part of the broader purpose of disclosure requirements in the capital market: namely addressing information asymmetry between issuers and investors and, in turn, ensuring the efficient functioning of the market.⁵²

More specifically, the obligation of ad hoc disclosure is closely linked to the informational efficiency of the market, as it contributes to the accurate formation of prices for the underlying financial instruments.⁵³ Indeed, the Efficient Capital Markets Hypothesis (ECMH) suggests that prices of traded securities reflect all available information.⁵⁴ Empirical evidence has shown that the broader the access to such information, the faster they are reflected in prices, thereby reducing the likelihood of speculative transactions by a closed group of insiders.⁵⁵ Accordingly, the disclosure requirement under Article 17 MAR seeks to ensure that the prices at which financial instruments are traded reflect their true value.⁵⁶ This, in turn, enhances allocative efficiency by enabling investors to more accurately assess the quality of the offered securities, thereby reducing the risk of incorrect investment decisions⁵⁷ and limiting the likelihood of unscrupulous issuers dominating the market.⁵⁸

B. The autonomy of ad hoc disclosure from the prohibition of insider trading (Article 8 MAR)

The establishment of a general legislative prohibition on the abuse of inside information, first codified at the international level in Section 10(b) of the U.S. Securities Exchange Act of 1934,⁵⁹ was initially linked to the protection of the efficient formation of prices in the market. A notable example of this view is the decision of the U.S. Securities and Exchange Commission (SEC) in In re Cady, Roberts & Co., which stated that: ‘If purchasers on all exchanges had available material information known by a selling insider, we may assume that their investment judgment would be affected and their decision whether to buy might accordingly be modified. Consequently, any sales by the insider must await disclosure of the information’.⁶⁰

At first glance, the above position appears almost indisputable. Indeed, in the absence of information asymmetry, the counterparty to the insider would have executed the transaction at a different price from the one ultimately agreed upon.⁶¹ Upon closer examination, however, it becomes apparent that the prohibition on trading based on inside information alone does not guarantee the accurate pricing of financial instruments unless accompanied by an obligation to disclose such information. In fact, as convincingly argued by a substantial number of prominent academics, including economist and legal scholar Henry Manne,⁶² the abuse of inside information not only does not harm the informational efficiency of the market but instead contributes—albeit incrementally—to the adjustment of prices in the right direction.⁶³ At the same time, it benefits long-term investors while primarily disadvantaging speculators.⁶⁴

The questioning of the role of the prohibition on insider trading in the accurate formation of prices has prompted the search for stronger justifications for its retention in capital market law. The prevailing view today links the relevant provisions to maintaining investor confidence in the market mechanism.⁶⁵ Disrupting this confidence could severely impact market liquidity,⁶⁶ raising transaction costs substantially, and impairing operational efficiency.⁶⁷ The prohibition of insider trading is, thus, considered essential for fostering trust, as it ensures that investors operate on an equal footing,⁶⁸ thereby eliminating opportunities for financial gains based on privileged access to information.⁶⁹

In view of the above, it becomes apparent that while the prohibition of insider trading is an essential precondition for the efficient functioning of capital markets,⁷⁰ its purpose is distinct from that of the ad hoc disclosure obligation. More specifically, while the prohibition of insider trading primarily aims to ensure market integrity, the obligation of ad hoc disclosure seeks to enhance allocative efficiency in capital markets. This is achieved by facilitating more accurate price formation, thereby reducing the negative effects that information asymmetry between issuers and investors may have on rational decision-making. Accordingly, the fact that certain information may trigger the prohibition of insider dealing does not necessarily imply an obligation to publicly disclose it, especially when such disclosure does not contribute to price accuracy. For instance, knowing that a listed beverage company has obtained promising results from a pilot lab trial on producing sugar-free soft drinks could give an unfair advantage to those with access to this information, thereby justifying a prohibition on trading based on it. However, disclosing such information may not necessarily benefit investors, especially if the lab results are still too preliminary and further testing is required.

4. Towards a revision of the MAR disclosure regime

A. Implications of the adoption of the one-step model

The preceding analysis demonstrates that the European legislator’s decision to adopt a single definition of inside information—applicable both to the prohibition of insider trading and the ad hoc disclosure obligation—is, in principle, doctrinally problematic, particularly when considering the distinct functions of these provisions. At the same time, however, the adoption of a one-step model also presents significant practical challenges for both issuers and investors.

More specifically, under the Regulation, information qualifies as inside information if it meets the following criteria: (a) it is of a precise nature, (b) it has not been made public, (c) it relates, directly or indirectly, to one or more issuers or financial instruments, and (d) its disclosure would likely have a significant effect on the price of those financial instruments or related derivative instruments.⁷¹ While this broad definition ensures timely and effective prevention of insider trading in the market, it also creates some uncertainty for issuers regarding the identification of information subject to the ongoing disclosure obligation under Article 17 MAR.⁷² A major source of this confusion lies in the broad formulation of the ‘precise nature’ criterion under the Regulation.⁷³ This encompasses not only circumstances or events that have occurred or may reasonably be expected to occur,⁷⁴ but also the intermediate steps of protracted processes that are linked to bringing about or resulting in the future circumstances or events intended by these processes.⁷⁵ For instance, in the case of a merger between two listed companies, not only the final event—namely, the signing of the merger agreement—but also the intermediate steps leading to this agreement (eg the boards of directors agreeing on the share exchange ratio) must be disclosed,⁷⁶ provided these steps independently meet the criteria for inside information.⁷⁷ Consequently, issuers often face significant compliance costs, including fees for lawyers and other external advisors,⁷⁸ to identify which steps in a protracted process constitute inside information and when such information becomes sufficiently precise for disclosure.⁷⁹

Beyond the aforementioned issues, the broad definition of inside information carries risks, such as the premature disclosure of information or an increase in requests to delay disclosure under Article 17(4) MAR, as issuers attempt to avoid potential administrative sanctions.⁸⁰ However, disclosing information—particularly negative information—at a preliminary stage, when the likelihood of changes remains high, may not only fail to reduce information asymmetry between issuers and investors but could also harm investors, given that premature disclosure may prompt them to make rash and suboptimal decisions (eg hastily liquidating shares out of fear of a negative event).⁸¹ This in turn increases opportunity costs and disrupts market efficiency by distorting informed decision-making processes.⁸² Furthermore, the frequent submission of requests to delay the disclosure of inside information⁸³ imposes significant costs on issuers and increases the administrative burden on national supervisory authorities, which are tasked with evaluating these requests.⁸⁴

B. The amendment of Article 17 MAR by the Listing Act Regulation

Against this background, in October 2024, the European Parliament and the Council adopted Regulation (EU) 2024/2809, which includes, among other things, targeted amendments to the MAR disclosure requirements.⁸⁵ Particularly noteworthy in this context is the revision of Article 17 MAR,⁸⁶ which aims at reducing the legal uncertainty faced by issuers regarding the information they must disclose to the public and the timing of such disclosures.⁸⁷

More specifically, the new Regulation, while maintaining the broad definition of inside information in Article 7 MAR, significantly narrows the scope of inside information subject to the ad hoc disclosure obligation under the first subparagraph of Article 17(1) MAR. In particular, this obligation no longer extends to intermediate steps of protracted processes, based on the rationale that information pertaining to such steps is not always sufficiently mature and, therefore, its disclosure could potentially mislead investors, instead of supporting informational efficiency.⁸⁸ On the contrary, issuers will only be required to disclose information related to the particular circumstances or event that a protracted process intends to achieve (the ‘final event’), as soon as possible after its occurrence.⁸⁹ In the case of a merger, for instance, disclosure should be made promptly after the boards of directors have decided to sign off the merger agreement, once its core elements have been agreed upon.⁹⁰ More broadly, in case of protracted processes aimed at or resulting in the conclusion of a contract, the Regulation clarifies that the final event should be deemed to have occurred once the key terms of the contract in question have been decided on.⁹¹

Therefore, following the amendment of Article 17(1) MAR by the Listing Act Regulation, the obligation of ad hoc disclosure in the context of protracted processes does not include announcements of mere intentions, ongoing negotiations, or, depending on the circumstances, the progress of such negotiations (eg a meeting between representatives of two companies involved in a merger).⁹² Moreover, it is almost self-evident that since issuers are no longer obliged to disclose information related to intermediate steps in protracted processes, they are also exempt from the requirements of Article 17(4) MAR regarding the delay of disclosure.⁹³ However, the exemption from the disclosure obligation does not relieve the issuer of the responsibility to maintain the confidentiality of such information until the circumstances or event arising from the protracted process are disclosed.⁹⁴ Accordingly, if the confidentiality of that information cannot be ensured, the issuer must publicly disclose it as soon as possible.⁹⁵ This is particularly relevant when a rumour, explicitly referring to unpublished inside information related to the stages of a protracted process, becomes sufficiently accurate to suggest that the confidentiality of this information can no longer be guaranteed.⁹⁶

However, the aforementioned revision of the ad hoc disclosure obligation in the context of protracted processes raises interpretative challenges concerning the determination of when a set of circumstances or an event becomes final and, thus, needs to be disclosed by the issuer.⁹⁷ In view of this, the Commission is empowered to adopt a delegated act to establish and, as necessary, review a non-exhaustive list of final events or circumstances in protracted processes and, for each event or circumstance, the moment when it is deemed to have occurred and must be disclosed pursuant to Article 17(1) MAR.⁹⁸ This implies that for information not included in this list, issuers must still assess whether, based on the specific circumstances, it satisfies the criteria for immediate disclosure to the investing public. Nevertheless, the list is expected to streamline and simplify the assessment process by serving as a reference point for issuers.⁹⁹

5. An initial evaluation of the revised Article 17 MAR

A. Benefits and drawbacks for issuers and investors

As previously noted, the amendment of Article 17 MAR aims to enhance legal certainty concerning the scope of the ad hoc disclosure obligation by mitigating challenges associated with the requirement to disclose information before it has reached the required stage of maturity to be classified as precise. This amendment is expected to render the MAR disclosure regime less burdensome for issuers, more predictable for investors, and ultimately more conducive to efficient price formation in the capital market.¹⁰⁰

Indeed, for issuers, narrowing the scope of the obligation to disclose inside information in the context of protracted processes can help reduce both indirect costs (eg reputational damage or loss of competitive advantage due to premature disclosure) and, more importantly, direct costs related to regulatory compliance (eg administrative expenses).¹⁰¹ This is largely attributed to the anticipated decrease in reliance on specialized external or internal advisors to determine, on a case-by-case basis, whether information related to an intermediate step of a protracted process qualifies as inside information.¹⁰² Furthermore, the mechanism for delaying the disclosure of inside information under Article 17(4) MAR is expected to be used less frequently, thereby alleviating the significant costs involved in interpreting and applying the relevant conditions.¹⁰³ Besides, the parallel introduction of a non-exhaustive list of final events in protracted processes that trigger the ad hoc disclosure obligation can enhance legal certainty for listed companies by offering a clearer and more predictable disclosure framework, thus also reducing compliance costs.¹⁰⁴ At the same time, however, for events not included in this list, the decision to disclose ultimately rests with the discretion of the respective issuer, who must consider all relevant circumstances on a case-by-case basis. This may, in turn, undermine the provision’s effectiveness by creating uncertainty for issuers¹⁰⁵ and exposing them to sanctions in cases of incorrect assessment.¹⁰⁶ Yet, it should be noted that to assist issuers in this process, ESMA has proposed the introduction of three categories of protracted processes, defined on the basis of the actors involved, that are likely to result in a final event qualifying as inside information, and, for each category, the moment when disclosure should occur.¹⁰⁷ While this categorization and the associated disclosure principles apply to the listed processes, they could also serve as valuable guidance for issuers when evaluating other, non-listed processes.¹⁰⁸

For investors, the introduction of a narrower definition of inside information regarding the ad hoc disclosure obligation in the context of protracted processes may, at first glance, appear to undermine the informational efficiency of the market and, by extension, its liquidity.¹⁰⁹ Indeed, although this approach offers issuers greater clarity concerning their disclosure duties, it simultaneously limits both the volume and the speed at which information becomes available to the investing public.¹¹⁰ At the same time, though, the abolition of the requirement to disclose inside information related to intermediate steps of a protracted process could, under certain conditions, prove beneficial to investors. More specifically, as previously explained, such information is often preliminary in nature, and its disclosure may result in inaccurate or misleading conclusions regarding the value of the financial instruments to which it pertains.¹¹¹ Therefore, exempting issuers from the obligation to disclose such information can ensure that the information made available to the market is sufficiently mature and accurate, thereby supporting more informed investment decisions.¹¹² That said, the distinction between an intermediate step and a final event is not always straightforward, as the outcome of a specific process may, on certain occasions, be regarded as an intermediate step in a broader process.¹¹³ This is particularly true for medical tests and trials, which, albeit part of a larger process, may also be considered distinct processes due to their duration, complexity, and structure.¹¹⁴ In view of this, ESMA has proposed that such tests and trials be treated as distinct processes, with their conclusion considered as a final event to be disclosed to the public.¹¹⁵ But while this proposal has some merit, it may run counter to the objective of enhancing the informational efficiency of the market, especially if an announcement is made at a very early stage of a test or trial and if it fails to emphasize that the final event may never materialise. Besides, it could create confusion for issuers outside the biotech and pharmaceutical sectors, since trials and tests are common procedures for obtaining authorization to commercialise products across various industries. In this regard, the Commission should exercise caution when determining the indicative list of events and circumstances which are considered final in the context of protracted processes.¹¹⁶ In any event, this list could prove useful for investors as it can increase consistency in the application of the ad hoc disclosure duty, thereby enhancing predictability and facilitating the assessment and comparison of disclosed information.¹¹⁷

B. Alternative solutions—particularly the US model

The previous analysis suggests that the revision of Article 17 MAR regarding the ad hoc disclosure obligation in protracted processes, while a step in the right direction, does not fully resolve the practical challenges associated with the application of the one-step model under the Regulation.¹¹⁸ This is largely because this provision is framed as a standard, shifting the burden onto issuers to determine whether its application criteria are met in each specific case.¹¹⁹ In this context, during the public consultation on the Commission’s proposal to amend MAR, the question of introducing a closed list of events to be regarded as inside information for the purposes of the ad hoc disclosure duty was raised.¹²⁰ Such a list would be exhaustive, meaning that issuers would have no obligation to disclose events not included therein. However, issuers would retain the option to voluntarily disclose material information falling outside the list at their discretion.¹²¹

Nonetheless, this alternative option was ultimately rejected by the Commission.¹²² While it offered clear benefits for issuers—relieving them of the burden of assessing whether each piece of information qualifies as inside information and thereby reducing compliance costs¹²³—the potential negative implications for investors played a decisive role in its dismissal. In particular, it was argued that compiling and maintaining a truly comprehensive closed list of events triggering the ad hoc disclosure obligation is highly challenging, potentially preventing critical inside information from reaching investors.¹²⁴ Consequently, not only would the risk of insider dealing be increased,¹²⁵ but the market’s informational efficiency could also be jeopardized, undermining the rational allocation of investment capital.¹²⁶

The Commission’s position, however, is not without critique. The proposal notably draws inspiration from US law, where there is no general obligation for the immediate disclosure of new material information. Instead, as part of their periodic disclosure obligatons,¹²⁷ issuers of securities in the USA are required to provide timely and regular updates on material changes in their financial condition or operations between quarterly financial statements.¹²⁸ These updates are provided through the filing of a standardized ‘current report’, known as Form 8-K,¹²⁹ and are limited to the occurrence of a specific set of events or circumstances, such as the filing of bankruptcy or a material change in the rights of security holders.¹³⁰ In other words, under US securities law, the ad hoc disclosure obligation applies solely to the events explicitly listed in Form 8-K.¹³¹ Although this approach by the US legislator differs significantly from the ad hoc disclosure regime under MAR,¹³² it does not appear to undermine investor protection. On the contrary, empirical research indicates that providing periodic updates to the market through Form 8-K enhances informational efficiency.¹³³

Of course, the above observations do not automatically lead to the conclusion that adopting the US model into EU securities law is the ideal solution. This is because a disclosure regime based on an exhaustive list of events may lead to the non-disclosure of important information, particularly during the early stages of its implementation, thus potentially reducing investors’ confidence in the capital markets.¹³⁴ At the same time, the distinct characteristics of EU capital markets law must be considered, as it represents a synthesis of diverse and often conflicting approaches among Member States regarding the regulation of the financial sector.¹³⁵ Besides, it should not be overlooked that a revision of this magnitude to the MAR disclosure regime would involve substantial costs and uncertainties, both during the transition period preceding its implementation and in the application of the new rules.¹³⁶ In any case, the US model can serve as a source of inspiration for targeted improvements to the EU ad hoc disclosure system. These improvements could include, for example, the adoption of more detailed guidelines by ESMA regarding the events that trigger the obligation for immediate disclosure to the investing public. Such an initiative would not only enhance legal certainty for issuers but also offer greater clarity for national competent authorities (NCAs) in supervising and enforcing the relevant provisions.

6. Conclusion

The amendment of Article 17 MAR by Regulation (EU) 2024/2809, while not abolishing the one-step model in the EU market abuse regime, represents a significant departure from the CJEU’s decision in the Geltl case, by exempting intermediate steps in protracted processes from the ad hoc disclosure obligation. As a result, issuers are now required to disclose only information related to the final circumstances or the event that the protracted process is intended to achieve or results in. Such disclosure must occur as soon as possible after these final circumstances or the event materialize.

In this framework, the revised provision is expected to benefit securities issuers by reducing compliance costs, particularly those related to engaging specialized advisors to assess whether information qualifies as inside information and to implement the delay mechanism under Article 17(4) MAR. Moreover, the new disclosure system is anticipated to offer advantages for investors as well. While the volume of disclosure will decrease, the information shared will be more mature and accurate, facilitating more rational and well-informed investment decisions.

At the same time, identifying the exact moment when a set of circumstances or an event is finalized is often challenging, which may undermine predictability for market participants and, by extension, legal certainty. With this in mind, the Commission has been tasked with adopting a delegated act that establishes an indicative list of final events or circumstances in protracted processes that unequivocally trigger the ad hoc disclosure duty. In addition, for each of these events or circumstances, the act will define the moment at which it is deemed to have occurred. This will help issuers more accurately identify the point in time when their obligation to inform the investing public arises, thereby contributing to the more efficient functioning of the market.

Nonetheless, the non-exhaustive nature of the list implies that the absence of an event from it does not automatically mean that is should not be disclosed. Instead, issuers would still need to assess, on a case-by-case basis, whether certain inside information needs to be disclosed to the market. This could lead to conflicting interpretations among issuers to the detriment of investors and the smooth functioning of the internal market. Furthermore, in its consultation paper on the disclosure of inside information in protracted processes, ESMA proposed that when the outcome of a specific process constitutes an intermediate step in a larger process—such as the medical trials and tests conducted by biotech companies before requesting authorization to commercialise their products—it should be treated as a final event and, therefore, disclosed. Such differential treatment could, however, undermine issuers’ need for legal certainty, without necessarily enhancing informational efficiency, especially when disclosures are made at an early stage of the process.

In light of these shortcomings, this study stressed the need for supplementary or alternative measures to ensure, as much as possible, the uniform application of the relevant obligation. One potential solution could be the adoption of an exhaustive list of events or circumstances, the occurrence of which would trigger the ad hoc disclosure obligation, as provided under US securities law. However, since this approach was rejected during the negotiation phase of the Regulation, the responsibility for achieving this uniformity rests with the competent European and national authorities. ESMA should play a key role in this direction through the issuance of guidelines and the coordination of the supervisory activities of NCAs. At the same time, the Commission should ensure the continuous updating of the indicative list it has undertaken to establish, in close cooperation and dialogue with relevant authorities and stakeholders.

Conflict of interest. None declared.

Footnotes