Search Close search

HomeESMA issues recommendations concerning COVID-19, the duties of disclosure and financial expectations

ESMA issues recommendations concerning COVID-19, the duties of disclosure and financial expectations

12 March 2020

ESMA has published a short recommendation for listed companies concerning the handling of COVID-19 in connection with the duties of disclosure and financial expectations.

The European Securities and Markets Authority (ESMA) has published a recommendation concerning the handling of the COVID-19 virus under the Market Abuse Regulation [1] (MAR). The recommendation is available here.

ESMA recommends that issuers ensure:

  • That disclosure takes place as soon as possible of any relevant significant information concerning the impacts of COVID-19 on the undertakings’ fundamentals, prospects or financial forecasts or financial situation under the Market Abuse Regulation,
  • That there is transparency in the financial reporting on the actual and potential impact of COVID-19, to the extent possible based on both a qualitative and quantitative assessment on their business activities, financial situation and economic performance. This should be included in the annual report (if not yet finalised) or otherwise in their interim financial reporting disclosures,
  • That they should be ready to apply their contingency plans.

Investment managers should also ensure risk management and act accordingly.

Undertakings are already affected – or will be affected – by COVID-19 and the ensuing macroeconomic instability. Therefore, it is of particular importance that listed companies on a current basis consider the effects on their previously issued financial forecasts, including whether adjustments are required.

A number of large, listed companies have included a short description of COVID-19 in their company announcements in relation to issuing the 2019 annual report and financial forecasts. The majority of these announcements include a general comment concerning the uncertainty associated with the future effects of the COVID-19 virus. Considering the previously communicated information, undertakings will be obliged to consider the effects of COVID-19 and to publish the relevant adjustments.

Gorrissen Federspiel follows the development and on a current basis provides updates on new measures in this respect.

[1] Regulation (EU) No 596/2014 of the European Parliament and of the Council on market abuse

Get updates on news concerning COVID-19 by signing up to our news service
Sign up here

Sign up for our newsletter

Sign up for Gorrissen Federspiel’s news updates and receive the latest legal news and event invitations directly in your inbox.

Thank you for signing up

You have already signed up