Abstract
Before deciding on operations involving share issuance or sale, companies or shareholders may seek to disclose information to selected investors, in order to gauge their opinion on the envisaged market operation. Despite such “market soundings” risk violating the prohibition of insider trading, selective disclosures have been partially accepted in several European jurisdictions. Market soundings have been eventually regulated in the MAR, which clarifies under which circumstances they are allowed and the position of the involved parties. This article analyses the rules on market soundings in the MAR with regard to issuance in the secondary market and accelerated bookbuildings. In this context, the question arises of whether harmonised rules on market soundings are compatible with national company law regimes. To address this issue, it will be assessed how Italian and English company law regimes react towards selective disclosures. It will be shown that a tension may still exist between uniform rules on market abuses and national company law rules, mostly with regard to directors’ duties and liabilities.
Highlights
Regulation (EU) No 596/2014, the Market Abuse Regulation[1], and Directive 2014/57/EU,[2] which entered into force on July 3 2016,3 have replaced the Market Abuse Directive,[4] regulating insider trading[5] and market manipulations in the European Union.[6]
As we have described above, this provision was entailed in the MAD81 and is important for understanding whether and to what extent selective disclosure of inside information is allowed.[82]
The major point of this article is inquiring as to whether uniform rules on market sounding are at odds with national company law rules and principles, such as director fiduciary duties and principles of shareholders’ fair or equal treatment
Summary
Mucciarelli Abstract: Before deciding on operations involving share issuance or sale, companies or shareholders may seek to disclose information to selected investors, in order to gauge their opinion on the envisaged market operation. Such ‘market soundings’ risk violating the prohibition of insider trading and yet such selective disclosures have been partially accepted in several European jurisdictions. It will be stressed that market soundings might violate national company law rules and principles, mostly those related to directors’ duties and liabilities This Article addresses how Italian and English company law regimes react towards selective disclosures. Mucciarelli; Sections 1 and 6 were written by the authors together
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