Disclosure of inside information in protracted processes : An analysis of the Listing Act's amendments of Article 17 MAR

On 8 October 2024, the European Parliament and Council adopted the Listing Act, a legislative package aiming to simplify various regulations, such as the MAR, to increase the competitiveness and attractiveness of the EU capital markets.One amendment of the Listing Act concerns Article 17 MAR, which in its current form prescribes an obligation to disclose inside information as soon as possible.This obligation is vital to preserve investor confidence and promote effective and transparent capital markets.The underlying idea, as expressed by the efficient market hypothesis, is that disclosure of inside information enables all available and relevant information about the listed company to be reflected in the share price.Such complete reflection will ensure accurate price formation and a highly efficient market; in other words, a well-functioning market that possesses the investors' confidence.With the importance of an appropriate obligation to disclose inside information in mind, the purpose of this thesis is to examine what the amendment of Article 17 MAR consists of and to analyze the expediency of such amendment in light of the efficient market hypothesis.According to the amended Article 17 MAR, inside information concerning a circumstance or event that is part of a protracted process must only be disclosed if it relates to a final circumstance or event in such process.In comparison with the preceding meaning of Article 17 MAR, which does not differentiate between inside information relating to intermediate or final circumstances or events, the Listing Act's amendment thus reduces the scope of the obligation in Article 17 MAR to disclose inside information by excluding inside information that relates to intermediate steps in protracted processes.As intended by the Listing Act, the amendment of the obligation to disclose inside information will likely be advantageous for issuers as the financial and administrative burden caused by the previous purport of the obligation will be reduced.However, for investors, the restricted scope of the obligation risks, at least in theory, resulting in a significantly reduced amount of information at their disposal.In light of the efficient market hypothesis, this may also result in a less accurate price formation and a less efficient market than a broader obligation, such as the preceding one, would result in.Nonetheless, due to the fact that disclosures of inside information relating to intermediate steps in protracted processes, to a great extent, have been postponed pursuant to Article 17(4) MAR, the consequences for investors, as well as the impact of the amendment on the market's efficiency, will likely be limited in practice.