‘Pre-close calls’ under the spotlight

'Pre-close calls' with analysts are sometimes held just before 'close periods' preceding an interim or year-end financial report, during which issuers avoid providing additional information or updates. The European Securities and Markets Authority (ESMA) has issued a statement reminding issuers that 'pre-close calls' carry inherent risks of inadvertent unlawful disclosure of inside information, and encouraging them to follow good practices when engaging in such calls to help maintain fair, orderly, and effective markets.

Following some recent news in the media suggesting a connection between episodes of high volatility in share prices and 'pre-close calls', ESMA reminds issuers that any disclosure of inside information should only take place in accordance with the Market Abuse Regulation (MAR) - the equivalent UK market abuse rules can be found here: Market abuse | FCA. Consequently, issuers should only share non-inside information during these 'pre-close calls'.

To address potential concerns related to pre-close calls, ESMA recommends following several good practices, including:

1. Prior to a 'pre-close call', carry out an assessment of the information the issuer intends to disclose, making sure that it is not inside information; 

2. Inform the public about the upcoming 'pre-close calls' on the issuer’s website, highlighting the relevant details (date, place, topics and participants); 

3. Make the material and documents used simultaneously available on the issuer’s website; and

4. Record the 'pre-close calls' and make the recordings available to the regulator on request, keep records of the information disclosed during the “pre-close calls” and publish such records on the issuer’s website, to permit access to those records by the public at large.