FINANCIAL COMMUNICATION: FRAMEWORK AND PRACTICES - 2019 EDITION

21 In principle, the issuer must disclose this information as soon as possible, if its financial instruments have been admitted or are subject to a request for admission to Euronext Paris, Euronext Growth or Euronext Access 17 .The issuer and its executives may be held liable in the event of failure to comply with this requirement. France’s supreme court of appeal ( Cour de cassation ), has ruled that, since the Market Abuse Regulation (MAR) came into effect, the issuer’s executives continue to be liable - as set forth in article 221-1 of the AMF General Regulations (since unamended) - in the event of delayed disclosure of insider information, even though the MAR does not provide for such liability (Cass. Com., November 14, 2018, no. 16-22.845).The Cour de cassation stipulates that the provisions of the MAR only constitute the minimal measures that Member States must implement to ensure that competent authorities have the powers to impose appropriate administrative sanctions and measures to enforce the rules for the smooth functioning of the market. Nonetheless, under the terms of article 17.4 of the Market Abuse Regulation and article 223-6 of the AMF General Regulations, and as specified in AMF Position/Recommendation no. 2016-08, an issuer may, on its own responsibility, delay disclosure to the public of insider information, provided that the three cumulative conditions below are met: n immediate disclosure is likely to prejudice the legitimate interests of the issuer, it being specified that the issuer merely has to refer to its corporate purpose or a vague general principle such as business confidentiality or commercial, economic or strategic interest to justify deferring dissemination 18 . ESMA has issued guidelines that provide a non-exhaustive and indicative list of legitimate interests of issuers to delay disclosure of insider information, provided that the two additional conditions required by article 17.4 of the Market Abuse Regulation are fulfilled.The guidelines, which are reiterated in AMF Position/Recommendation no. 2016-08, cover the following circumstances 19 : - the issuer is conducting negotiations, such as mergers, acquisitions, splits and spin-offs, purchases or disposals of major assets or branches of corporate activity, restructurings and reorganisations, where the outcome of such negotiations would likely be jeopardised by immediate public disclosure of that information 20 ; - the financial viability of the issuer is in grave and imminent danger, although not within the scope of the applicable insolvency law, and immediate public disclosure of the insider information would seriously prejudice the interests of existing and potential shareholders, by jeopardising the conclusion of the negotiations aimed at ensuring the financial recovery of the issuer; - the insider information relates to decisions taken or contracts entered into by the management body of an issuer which require, pursuant to national law or the issuer’s articles of association, the approval of another body of the issuer (other than a shareholders’ meeting) in order to become effective, provided that: i. immediate public disclosure of that information before such a definitive decision would jeopardise the correct assessment of the information by the public; and ii. the issuer arranged for the definitive decision to be taken as soon as possible; - the issuer has developed a product or an invention and the immediate public disclosure of that information is likely to jeopardise the intellectual property rights of the issuer; - the issuer is planning to buy or sell a major holding in another entity and the implementation of such a plan is likely to be jeopardised with immediate disclosure of that information; 17 – Article 17.1 of the Market Abuse Regulation. 18 – AMF Position/ Recommendation no. 2016-08 of October 26, 2016 – Guide to ongoing disclosures and the management of insider information (section 1.2.2.1). 19 – ESMA – Guidelines on the Market Abuse Regulation (“MAR”). Delay in the disclosure of inside information, ESMA/2016/1478. 20 – Example of a deferred financial disclosure (negative) considered as unjustified, as not prejudicial to the company’s legitimate interests, while the company was involved in negotiations with an investment company to increase its share capital (AMF Enforcement Committee, April 13, 2018).