Global Financial Strategy - Esma: Release dividend info earlier

Global Financial Strategy

Search the site >>Advanced search

First for financial regulatory news and views

Esma: Release dividend info earlier

Monday 9 January 2012 – by [email protected]

EU firms should release a host of information about their planned dividend policies and payments before they are even signed off, to ensure compliance with insider information rules.

The European Securities and Markets Authority argues that details of likely dividend payments should be considered insider information if it is likely to have a noteworthy effect on the issuer’s shares.

The supervisory body says that information relating to securities issuances can have a “significant effect” on the price of futures and other derivatives.

In order to comply with Europe’s market abuse directive, Esma says firms should disclose information about their likely dividend policies “as soon as possible” to ensure that markets are given enough time to price in any changes.

In a guidance document released on Monday, Esma says firms should release details even while policies are still being considered internally and before they are approved by the general shareholders meeting.

The move should be complied with by issuers of shares that are used as underlying assets of listed derivatives contracts.

Related articles:

UK’s Wheatley appointed to Esma board

EU regulators monitor short sellers

BoA review after dividend disclosure

“A number of episodes of late or incomplete disclosure of the full details of dividend payment announcements that may have caused undue effects on equity derivatives prices have recently come to Esma’s attention,” the authority’s document says.

“Esma reminds issuers that they should consider any relevant information related to dividend payments and policies as insider information, should this information be likely to have a significant effect on the prices of either the issuer’s shares or related derivatives or both.”

The Frankfurt-based authority highlights that provisional and final amounts, any changes to previously announced information and alterations to traditional dividend payment patterns should all be released.

Send us your thoughts (in strict confidence) or submit an article in response:
Email: [email protected]

WHAT DO YOU THINK?

Name:

Email:

Comment:

Post as	Anonymous
	Display name

Please, enter security code

No comments yet.

Login	Register	Most read	Most commented
Username Password >> Remember me >> Forgotten your password? >> Sign Up GFS is pleased to offer you a two-week free trial. You will receive a daily email bulletin of the latest regulatory news and analysis and a weekly email round-up. Please complete the free trial form. You will also receive full access to our online site.

EDITOR’S CHOICE

INTERVIEWS & FEATURES

STRAW POLL

Will markets in 2012 have a tougher time than 2011?

FIND A REGION