‘Madamina, Il Catalogo E’ Questo…’. the Duty to Disclose Inside Information and the Proper Organization of the Company: The Market Abuse Regulation (‘MAR’) and Italian Company Law.

Abstract

The duty of an issuer to disclose inside information to the public as soon as possible is set out by Article 17 MAR, and notoriously aims at satisfying market transparency, and facilitating the price formation mechanism. This requirement is primarily addressed to satisfy the needs of the public and of the market, in line with the Efficient Capital Markets Hypothesis that underpins the entire construction of MAR. However, the disclosure obligation also has significant internal impacts on the organization of the company, which also need to be adequately framed and understood according to the general provisions of company law contained in the Italian civil code. The interrelationships between MAR and general corporate law provisions seem to entail many consequences as to the matter under discussion. First of all, with regard to the ways in which directors provide adequate safeguards for compliance with disclosure regulations; secondly, with regard to liability profiles; finally, with regard to the flow of information within companies and groups of companies. In fact, the disclosure regime of inside information is relevant both in terms of compliance with MAR and in terms of compliance with the rules that refer to the need for companies to have a proper business organization (as set out, first of all, for all kinds of companies by Article 2086 of the Italian Civil Code, as recently amended). Therefore, the disclosure of inside information also plays an internal role, as complying with those rules has a relevant impact within the company’s structure and organization. This also entails several consequences upon the issuer in terms of liability for breach of the disclosure regime set out by the European Regulation.