New rules on dissemination of inside information under discussion

Across the EU, the Transparency Obligations Directive is in the limelight. With an implementation deadline of January 20th next year, regulators are creating working groups and holding public hearings with the aim of launching consultation papers.

The timing is being worked out in reverse. Most regulators need to give three months notice of changes to their Listing Rules. They also need to consult in advance, allowing two months for comment. And of course with two months lost to the grand (European) summer vacation, the consultation papers need to be in the public domain in mid April at the latest.

The FSA for example recently held a public hearing, and laid out their timetable of a consultation paper in later March.

Under the dissemination proposals, the FSA is likely to propose continuing the existing PIP regime. One of the debates on this is whether the existing dissemination – focussed largely on the UK and on financial news providers used by professionals – satisfies the need laid out in TOD for news to be disseminated “across the EU” and “in a manner capable of being disseminated to the general public”.

And of course a major challenge for regulators is whether the current proposals for implementation from the European Commission – the so-called level 2 implementation - will be changed. Most of the regulators are proceeding on the basis that the current version is final. If however it were to be changed substantially, more consultations – and consequent delay - could follow.

Meanwhile, I wonder whether there are second thoughts about the need for an Online Access Mechanism as foreseen in TOD? The costs of creating and maintaining these in every country across the EU are substantial and no obvious means of funding it - aside from the inevitable load on listed companies - has emerged.