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Esma: Release dividend info earlier

Monday 9 January 2012 - by

Esma flag - photo by Esma
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.

"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.

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