Investor Relations - A Practical Guide - Investis

Even if a company does have full details of certain
inside information, it can still delay disclosure if its
reason for doing so is so as not to prejudice its
legitimate interests, provided that:
• such non-disclosure would not be likely to
mislead the public;
• any person receiving the information owes the
company a duty of confidentiality; and
• the company is able to ensure the confidentiality
of that information.
An example of this may be where confidential and
price sensitive negotiations on a deal are underway
by a company and its advisers, and disclosure of
the information would prejudice the outcome of the
transaction.
In adverse market conditions, companies may be
reluctant to publish negative news in
circumstances where trading may have already
substantially deteriorated. The DTRs do recognise
that where the company’s financial viability is in
grave and imminent danger (although not
insolvent), disclosure of rescue negotiations can
be delayed for a limited period if the information
would seriously jeopardise shareholders’ interests
by undermining the conclusion of those
negotiations. However, it is important to be clear
that this only applies to the details of the specific
transaction and not to the fact that the company is
in financial difficulty, which in itself remains
disclosable. Companies should consult their
advisers on such matters.
Although the inside information provisions do not
apply directly to AIM companies, similar principles
should be taken into consideration. Pursuant to the
AIM Rules for Companies (“AIM Rules”), an AIM
company must disclose any unpublished price
sensitive information without delay. However, the
AIM Rules do provide a similar carve-out to the
inside information exemption in that an AIM
company need not disclose unpublished information
about impending developments or matters which
are currently in the course of negotiation. If an AIM
company is in any doubt as to whether certain
information should be disclosed to the market, it
should consult with its Nominated Adviser.
How to announce
Information that is disclosed must be available to
everyone. The concept of selective disclosure to
only certain people is incompatible with a
transparent market and is therefore not possible,
except in very limited circumstances such as when
there is valid delay in disclosure as noted above.
In order for information to be accessible by all, an
announcement must be released to the market via
a Financial Services Authority (FSA) approved
Regulatory Information Service (RIS) in the first
instance so as to ensure prompt and fair
disclosure to the market.
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