On 29 May 2024, the European Securities and Markets Authority (ESMA) issued a statement reminding issuers about the legislative framework that applies to ‘pre-close calls’ and encouraging them to follow good practices during those calls, with the aim of helping maintain fair, orderly and effective markets.
ESMA published the reminder after recent news in the media suggested a connection between episodes of high volatility in share prices and ‘pre-close calls’. Pre-close calls are communication sessions between an issuer and analysts who generate research, forecasts and recommendations related to the issuer’s financial instruments. These sessions occur just before the periods preceding an interim or year-end financial report, during which issuers avoid providing additional information or updates. The outcomes of pre-close calls can influence market expectations and instrument prices.
The statement reminds issuers that any disclosure of inside information should only take place in accordance with the Market Abuse Regulation (MAR), and consequently issuers should only share non-inside information during these pre-close calls.
In order to address potential concerns related to pre-close calls, ESMA recommends following a number of good practices, including:
- Prior to a pre-close call, carrying out an assessment of the information intended to disclose, making sure that it is not inside information.
- Informing the public about the upcoming pre-close calls on the issuer’s website, highlighting the relevant details (date, place, topics and participants).
- Making the material and documents used simultaneously available on the issuer’s website.
ESMA also notes that specific episodes and identification of potential breaches of MAR should be analysed by national competent authorities.