Disclosure "without delay" of inside information
From 1 April 2017 inside information must be disclosed "without delay" also when arising outside of exchange trading hours. Announcements of large shareholdings must be made "immediately" during 08:30 and until 17:30 hours CET. Changes to this effect have been made to the Oslo Børs Code of Practice for IR, which also has been updated to reflect the rescindment of the requirement to publish quarterly reports. In Circular No. 1 and 2 of 2017, Oslo Børs addresses the practical consequences of these changes.
Practical consequences of the changes to the timing of disclosure of inside information
The changed interpretation of the wording "without delay" in section 5-2 of the Securities Trading Act with regard to the timing of disclosure of inside information, will be of practical significance for issuers in relation to public disclosure outside exchange trading hours. At the same time, Oslo Børs stresses that the new regime does not entail a general duty for issuers to remain stand-by in order to disclose sensitive information arising around the clock. If unexpected events implying inside information take place for example at night or "at a time when an issuer cannot be expected to have personnel available to deal with the situation immediately", issuers will be permitted more time to assess the situation before disclosure is required. However, if the issuer has reason to expect or is aware in advance that an event subject to disclosure will take place, there will be a requirement for preparedness in order to ensure that inside information is timely and securely disclosed. Moreover, the time available will normally be shorter in such cases than with regard to unexpected events.
Oslo Børs points out that the change in interpretation does not lead to changes as to how the duty to confidentially notify Oslo Børs on deferred disclosure of inside information pursuant to section 5-3 of the Securities Trading Act is currently practiced. Going forward, it will still be sufficient to notify Oslo Børs of any decision to defer disclosure within the start of trading on the following trading day.
Certain situations with regard to the changes to the timing of disclosure of inside information
Disclosure of private placements
- If made outside opening hours, it will no longer be accepted for issuers to wait until the next morning following the board's decision to execute the private placement to publicly disclose its result. However, issuers will normally still be able to invoke deferred disclosure regarding the level of interest in the order book etc. until the board's decision has been made.
- The relevant cut-off time for public disclosure will normally be when the board has made its decision on price, volume, allocation and any other significant and relevant items. The timing of other processes, including those regarding stock exchange notices, must therefore be adapted accordingly.
- Exceptionally, circumstances may arise that make it legitimate to delay making an announcement even once the board decision has been made, or potentially imply that information has to be published before such decision has been made.
Disclosure of financial reports (e.g. annual and interim reports)
- The practice of arranging board meetings for approval of financial reports following the end of exchange trading hours and subsequently publish the report within the start of exchange trading hours at 08:00 hours CET the following trading day may continue, provided that the publication of the report is made in accordance with a published financial calendar.
- Financial reports which are completed on weekends or during public holidays must be publicly disclosed as expeditiously as possible after their approval. Further, if an issuer's financial calendar states that a financial report is to be publicly disclosed on a Monday morning or on a day following a public holiday, the board meeting at which the report is approved may be held at the earliest the previous evening.
- Financial reports approved by the applicable corporate body during exchange trading hours, must still be disclosed as soon as practically possible.
- Information on distribution of any dividends that are proposed or approved as an inherent part of the board's approval of a financial report, may be disclosed in connection with and at the same time as the financial report in question.
Oslo Børs emphasises that the changes to the timing of disclosure of inside information correspondingly affects disclosure rules pursuant to the Continuing obligations for Oslo Børs, Oslo Axess, Nordic ABM and Merkur Market that require certain corporate actions etc. to "immediately" be publicly disclosed. Unless the conditions for delayed publication are met, it will no longer be possible to delay disclosure until before the start of exchange trading hours on the following day.
Disclosure of large shareholdings
Until now, Oslo Børs has considered it sufficient for compliance with the "immediately" requirement pursuant to section 4-3 of the Securities Trading Act that announcements of transactions which trigger the duty to disclose transactions of large shareholdings and which take place after exchange trading hours is dispatched to the issuer concerned and to Oslo Børs before the start of exchange trading hours at 09:00 hours CET on the following day. From 1 April 2017, announcements of large shareholdings must be dispatched to issuers and to Oslo Børs for publication until 17:30 hours CET. If such transaction is executed after 17:30 hours CET, announcement must "be sent with sufficient time for Oslo Børs to be able to publish them starting at 08:00 on the following trading day".
Changes to the Oslo Børs Code of Practice for IR
Following the repeal of the requirement of the Securities Trading Regulations to publish quarterly reports and the changes to the timing of disclosure of inside information, Oslo Børs has amended the Code of Practice for IR as described below:
- In addition to disclosing annual and semi-annual reports, issuers are recommended to disclose interim reports for the first and third quarters. Further, it is recommended that semi-annual and interim reports for the first and third quarters are disclosed as quickly as possible and no later than by the 15th day of the second month following the end of the accounting period in question
- It is recommended that annual reports are disclosed as quickly as possible and no later than three months following the end of the accounting period in question, unless the company has released an interim report for the fourth quarter by this date
- Issuers are recommended to prepare interim reports for the first and third quarters, as well as fourth quarter interim reports where appropriate, in accordance with IAS 34 or in compliance with an equivalent accounting standard if the issuer reports in accordance with another recognised IFRS-equivalent accounting standard
- The Code of Practice applies to the extent that it is relevant to issuers which have equity certificates (no.: egenkapitalbevis) listed on Oslo Børs/Oslo Axess and that the Code of Practice may provide adequate guidance for issuers admitted to trading on Merkur Market
Circular No. 1/2017 is available here.
The updated Continuing obligations for Oslo Børs and Oslo Axess are available here.
The updated Continuing obligations for Merkur Market are available here.
The updated Bond Rules are available here.
The updated ABM Rules are available here.
Circular No 2/2017 is available here.
The updated Code of Practice for IR is available here.