Ad hoc publicity

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As ad hoc publicity are disclosure obligations of issuers of financial instruments designated. The notifications resulting from these obligations are referred to as ad hoc notifications, stock market releases or often also as mandatory notifications. Until July 3, 2016, ad hoc publicity was regulated in the German Securities Trading Act (WpHG). Since then, it has essentially been standardized across the EU in the Market Abuse Regulation (MMVO). This is a European regulation that serves to combat insider trading and market manipulation on the capital market .

The obligation to ad hoc publicity calls on companies to publish inside information as quickly as possible so that they can take note of the participants in the capital market. This is to prevent insider trading. Closely related to the obligation to publish ad hoc announcements is the obligation to report proprietary transactions by executives according to Art. 19 MMVO.

Duty of ad hoc publicity, Art. 17 Paragraph 1 Subparagraph 1 MMVO

(1) Issuers shall disclose insider information directly related to this issuer to the public as soon as possible.

Art. 17 Paragraph 1 Subparagraph 1 MMVO obliges issuers of securities to immediately publish inside information that directly affects them. According to Article 7 Paragraph 1 a of the MMVO, information about circumstances that are sufficiently specific and not publicly known and that are capable of significantly influencing the stock exchange price of a security is considered insider information . In the case of admitted bonds , on the other hand, the decisive factor is whether the information potentially adversely affects the ability of the issuer to meet its obligations. Typically, the disclosure requirement thus extends to significant decisions by governing bodies, significant business deals, restructuring and company takeovers.

While § 15 WpHG, the forerunner of Art. 17 MMVO, only extended the disclosure requirement to trading on the organized market , Art. 17 MMVO also includes the open market , i.e. business transactions outside the regulated market . The issuer must announce the information as soon as possible. This time limit is preserved in that the information is published without undue hesitation.

The disclosure requirement is intended to prevent current information from being reserved for insiders . This prevents insiders from using special knowledge to their own advantage. This also ensures that the participants in the capital market have the information they need to correctly assess the prices of financial instruments. The ad hoc publicity thus complements the ban on insider trading: while the ban threatens trading in insider knowledge with a punishable offense, the compulsion to ad hoc publicity is intended to prevent inside knowledge from arising.

Publicity procedure

An ad hoc announcement that is to be published must be made known to the Federal Financial Supervisory Authority (BaFin) and the stock exchanges before it is published ( Section 15 of the WpHG). The stock exchanges in particular then decide whether the share price should be suspended if excessive market reactions are to be expected. These advance notifications are followed by publication in supraregional stock exchange gazettes and electronically operated, widespread information dissemination systems, which according to Section 3b (3) of the Securities Trading Report and Insider Directory Ordinance (WpAIV) is generally to be carried out at least in German.

Almost all reports are published via ad hoc service providers commissioned by the issuer . In German-speaking countries, these are in particular the EQS Group (formerly the German Society for Ad-hoc Publicity) and the Pressetext news agency . These companies receive the notification to be published, usually directly by entering it in the online form. The notification is then forwarded to BaFin and Deutsche Börse . It is later passed on to national news agencies such as Bloomberg , Dow Jones and Thomson Reuters , who publish the report. This creates the public sphere required by Art. 17 Paragraph 1 MMVO. This advance transmission to BaFin and the stock exchange supervisory authority by fax is still mandatory. The subsequent forwarding and publication takes place 30 minutes after the advance dispatch to BaFin and the stock exchange. During this time, the exchange management, in particular, makes the decision as to whether the official price determination and thus exchange trading will be suspended for a certain period of time in the event of news of the extreme price reactions expected. It is also mandatory to submit the reports to the company register , which is the only quasi-official central office that also publishes all ad hoc communications.

Contrary to the widespread assumption that ad hoc announcements should be published outside of trading hours if possible, the opposite is the case. In a letter to the issuer, BaFin explicitly advised the issuer to publish ad-hoc notifications during trading hours, if possible, so that all market participants who are active during trading hours can be reached at the same time. Although many announcements are made before trading hours in order to give the market participants the time to think about the news in peace and then to act, in particular the announcement and implementation of accelerated bookbuildings take place during active market time, often even in the afternoon, when German and American Open exchanges.

Depending on the type of ad hoc notification, the legislator has set different reporting deadlines. The deadline for exceeding or falling below reporting thresholds is four trading days.

Exemption from the notification requirement

Requirements according to Art. 17 Paragraph 4 Subparagraph 1 MMVO

(4) An issuer or a participant in the emission allowance market can, at its own risk, postpone the disclosure of inside information to the public, provided that all of the following conditions are met:

a) the immediate disclosure would be likely to affect the legitimate interests of the issuer or participant in the market for emission certificates,
b) deferring disclosure would not be likely to mislead the public;
c) the issuer or participant in the market for emissions certificates can ensure that this information is kept confidential.

According to Art. 17 Paragraph 4 MMVO, an issuer can exempt himself from the obligation to provide inside information.

This presupposes, on the one hand, that the immediate disclosure would be capable of impairing the legitimate interests of the person required to disclose. An interest is justified in accordance with section 6 (1) sentence 1 WpAIV if it has greater weight in the individual case than the general interest in timely information to the capital market. According to section 6 (1) sentence 2 WpAIV, there is usually a legitimate interest if the information relates to ongoing transactions or negotiations, the disclosure of which could significantly influence the stock exchange or market price and endanger the interests of investors. This often applies to company acquisitions, for example, as premature publication of the relevant information can jeopardize the execution of the purchase. An interest in secrecy can also exist with regard to the preparation of a renovation .

On the other hand, the postponement of publication must not be suitable for misleading the public. The issuer is therefore prohibited from behaving in the market that contradicts secret inside information.

Finally, the person liable must be able to guarantee that the information will be kept secret until it is published. For this purpose, in accordance with Section 7 WpAIV , he must be able to ensure that the information only reaches those persons who are dependent on it to perform their duties at the issuer. According to Art. 17 Paragraph 7 Subparagraph 2 MMVO, it can be presumed that the confidentiality of the information is no longer guaranteed if a sufficiently precise rumor about the information becomes known.

If these three requirements are met, the issuer is entitled to withhold the information. This right to self-liberation exists as long as all requirements are met. If a prerequisite is no longer applicable, the issuer must therefore postpone the publication.

Requirement for a resolution

The regulation of Art. 17 Paragraph 4 MMVO corresponded to the earlier Section 15 Paragraph 3 WpHG. With regard to this norm, it was controversial in jurisprudence whether it was an exception to the disclosure requirement, which was already in effect by law, or whether a decision by the party subject to disclosure was required. The Federal Court of Justice did not take a position on this dispute in the Geltl case, which is fundamental for the legal treatment of the ad hoc disclosure requirement, in which a decision on the self-exemption had not been made. Rather, he referred to the figure of lawful alternative behavior , which can stand in the way of liability, even if the self-exemption has to be decided. According to this figure, liability can be waived if the issuer who does not publish inside information without a decision on self-exemption could have decided on such a self-exemption.

Requirements according to Art. 17 Paragraph 5 MMVO

Art. 17 Paragraph 5 MMVO grants credit and financial institutions an additional possibility of self-exemption . These can be exempted if the disclosure of the inside information could affect the financial stability of the issuer and the financial system, the postponement of the publication is in the public interest, the confidentiality of the information can be guaranteed and the competent authority agrees to the postponement before the decision to self-exempt.

Civil law consequences of a breach of the publication obligation

Liability of the Issuer

Violation of the disclosure requirement can lead to claims for damages by investors against the issuer. Section 15 (3) of the WpHG refers in this regard to Section 37b and Section 37c of the WpHG.

Section 37b WpHG

(1) If the issuer of financial instruments that are admitted to trading on a domestic stock exchange fails to immediately publish inside information that directly affects him, he is obliged to compensate a third party for the damage caused by the failure, if the third party

1. acquires the financial instruments after the omission and he is still the owner of the financial instruments when the inside information becomes known, or
2. Acquires the financial instruments before the inside information arises and sells them after the omission.

(2) According to paragraph 1, claims cannot be made against anyone who can prove that the omission was not due to willful intent or gross negligence.

(3) The claim according to paragraph 1 does not exist if the third party was aware of the inside information in the case of paragraph 1 no. 1 upon acquisition or in the case of paragraph 1 no. 2 upon sale.

(4) Further claims that may be raised according to the provisions of civil law on the basis of contracts or willful unlawful acts remain unaffected.

(5) An agreement by which the issuer's claims against members of the board of directors due to claims against the issuer pursuant to paragraph 1 are reduced or waived in advance is ineffective.

Section 37b of the WpHG is the relevant regulation if the issuer fails to publish inside information in breach of duty. Liability presupposes that the investor acquires a security to which the information to be published relates. Section 37b (1) of the WpHG names two situations in which such an acquisition can lead to a claim for damages. On the one hand, this is the case if the acquirer acquires a paper after it has not been published or is incorrectly published and holds it until the information becomes public. On the other hand, a claim can be made if the purchaser acquires the paper before it is not published and sells it after it.

The causality between the breach of duty by the issuer and the damage must be proven by the claimant, the investor. It is controversial in jurisprudence which requirements are to be placed on the proof of causality. In some cases, evidence of incorrect pricing is considered sufficient, since the disclosure requirement serves to ensure correct pricing on the capital market. In addition, it is usually not possible for the investor to provide evidence of causality. Others require proof of specific damage caused directly by the issuer's breach of duty. For example, this could be because the investor would not have acquired the security had the ad hoc announcement been properly published. This view is based on the wording of Section 37b WpHG, which relates to the damage caused by the omission .

Closely related to the prerequisites for proof of causality is the question of the extent of the liability for damages. Since the IKB decision, case law has assumed that the injured party has the right to choose: On the one hand, the claimant can request compensation for the exchange rate difference damage. This is the difference between the actual price and the price that would have existed if the ad hoc announcement had been duly published. If the investor has sold a security too cheaply or bought it too expensively, he can demand compensation in the amount of the difference to the price that would have existed if the publication had been duly published. If the purchaser can also prove that he would not have acquired the security when the ad hoc announcement was published, he can also return his paper for compensation in the amount of the purchase price. This is in line with the prohibition on the return of assets under Section 57 of the Stock Corporation Act (AktG) and the prohibition on acquiring own shares under Section 71 AktG.

According to Section 37b (2) WpHG, claims for damages are excluded if the issuer can prove that the failure to publish the ad hoc announcement is not due to intent or gross negligence . Liability according to Section 37b (3) WpHG is also excluded if the claimant is aware of the concealed fact or the incorrectness of the information published when the security was acquired or sold, as in this case he is not worthy of protection.

Section 37c WpHG

(1) If the issuer of financial instruments admitted to trading on a domestic stock exchange publishes untrue inside information that directly affects him in a notification pursuant to Article 17 of Regulation (EU) No. 596/2014, he is to be replaced by a third party of the damage caused by the fact that the third party relies on the accuracy of the inside information if the third party

1. acquires the financial instruments after publication and he is still the owner of the financial instruments when the inaccuracy of the inside information becomes known, or
2. Acquires the financial instruments before publication and sells them before the inaccuracy of the inside information becomes known.

(2) Pursuant to Paragraph 1, claims cannot be made against anyone who can prove that he was not aware of the inaccuracy of the inside information and that the ignorance was not due to gross negligence.

(3) The claim according to paragraph 1 does not exist if the third party was aware of the inaccuracy of the inside information in the case of paragraph 1 no. 1 upon acquisition or in the case of paragraph 1 no. 2 upon sale.

(4) Further claims that may be raised according to the provisions of civil law on the basis of contracts or willful unlawful acts remain unaffected.

(5) An agreement by which the issuer's claims against members of the board of directors due to claims against the issuer pursuant to paragraph 1 are reduced or waived in advance is ineffective.

Section 37c (1) of the WpHG relates to the publication of an ad hoc announcement that is incorrect in terms of content. The factual requirements of the standard otherwise correspond to those of Section 37b WpHG. Therefore, the claimant has the right to choose under Section 37c of the WpHG, provided he can provide comprehensive evidence of causality. In some cases, a simplification of the evidence is proposed to the effect that the requirements for proof of causality are reduced if the claimant proves that the incorrect information has led to positive investor sentiment on the capital market.

Board Liability

In addition to the liability of the issuer, personal liability of its board of directors may also be considered. According to previous case law, such liability can only be based on the general tort law of the German Civil Code (BGB). In particular, liability for deliberate immoral damage according to Section 826 of the German Civil Code (BGB) comes into consideration . This presupposes that the board of directors deliberately harms another in a manner contrary to common decency. Such behavior occurs, for example, when the board of directors deliberately publishes a false report. However, the proof of causality, i.e. the proof of the investor that his purchase decision was influenced by the breach of the information obligation, presents particular difficulties. If this proof of causality is successful, the investor can demand to be presented as if he had not acquired the securities. He will then be reimbursed the purchase price from the defendant, although he must of course offer to transfer the shares. If the investor has sold the shares in the meantime, the sales proceeds are to be offset against the claim for damages. However, if he only succeeds in proving that the notification influenced the stock exchange price, at least a claim for compensation for the price difference damage comes into consideration according to the principles of the IKB decision.

Liability under Section 823 (2) of the German Civil Code (BGB) presupposes that the damaging party violates a protective law. A protection law is a norm that at least also serves to protect individual interests. The obligation to ad hoc publicity from Art. 17 MMVO comes into consideration as such a protective law. For the forerunner of this standard, § 15 WpHG, the property of a protective law was denied, since the standard did not serve to protect the individual investor, but the whole of the investors. The legislature clearly expressed this intention during the legislative process. Article 17 MMVO also primarily aims to protect the capital market as such. Whether this standard represents a protective law is therefore controversial in jurisprudence.

Some legal scholars also advocate liability for damages based on the principles of general civil law prospectus liability . The objection to this is that this liability cannot be transferred due to the different objectives of the sales prospectus and ad-hoc publicity.

Public law consequences of a violation of the publication obligation

According to section 39 (3d) numbers 6-11 of the WpHG, a breach of the publication requirement constitutes an administrative offense. According to section 39 (4a) sentence 2 number 2 of the WpHG, this can amount to up to two and a half million euros and two percent of the total turnover that the company made in the previous decision by the authorities Financial year.

abuse

The great attention paid to ad hoc reports in the capital market leads some issuers to use ad hoc reports for PR purposes. At the time of the Neuer Markt , this practice was widespread: the number of ad hoc reports published annually increased fivefold in the years 1995–2000. An empirical study by André Güttler confirms the abuse of ad hoc reports by participants in the Neuer Markt.

With the 4th Financial Market Promotion Act (2002), the legislature specified the permissible content of ad hoc reports. The publication of other information that does not fall under the publication obligation has since been prohibited and can be punished with fines. Agencies like the DGAP reacted to this by setting up parallel distribution channels for press releases. These measures have contained the abuse of ad hoc publicity, if not completely prevented.

A short paragraph with general information about the company's business is tolerated in ad hoc reports.

Web links

See also

Individual evidence

  1. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 388.
  2. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 386.
  3. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 395.
  4. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 380
  5. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 382.
  6. ↑ http://www.handelsregister.de/rp_web/direct-download.do;jsessionid=9F843333CF31DDEBD11F359E113205F8-n1.tc032n02?id=6 (link not available)
  7. ^ Website of press release. Retrieved July 9, 2016 .
  8. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 403
  9. ↑ http://www.dgap.de/dgap/static/DGAP/Produkte/
  10. ↑ Schnorrenberg, Thomas: Investor Relations Management, 2008, Gabler Verlag (page 31)
  11. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 407
  12. ^ Katja Langenbucher: Stock corporation and capital market law . 3. Edition. CH Beck, Munich 2015, ISBN 978-3-406-66738-1 , § 17, Rn. 39-40.
  13. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 412.
  14. ^ Katja Langenbucher: Stock corporation and capital market law . 3. Edition. CH Beck, Munich 2015, ISBN 978-3-406-66738-1 , § 17, Rn. 42.
  15. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 418-419.
  16. ^ Katja Langenbucher: Stock corporation and capital market law . 3. Edition. CH Beck, Munich 2015, ISBN 978-3-406-66738-1 , § 17, Rn. 43.
  17. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 404.
  18. ↑ Barbara Grunewald, Michael Schlitt: Introduction to Capital Market Law . 3. Edition. CH Beck, Munich 2013, ISBN 978-3-406-65413-8 , pp. 281 .
  19. ^ BGH, judgment of April 23, 2013, II ZB 7/09 = Neue Juristische Wochenschrift 2013, p. 2114.
  20. ↑ Christoph Kumpan: Section 37b WpHG , Rn. 3. In: Adolf Baumbach, Klaus Hopt, Christoph Kumpan, Hanno Merkt, Markus Roth (eds.): Commercial Code: with GmbH & Co., commercial clauses, banking and stock exchange law, transport law (without maritime law) . 37th edition. CH Beck, Munich 2015, ISBN 978-3-406-67985-8 .
  21. ^ Katja Langenbucher: Stock corporation and capital market law . 3. Edition. CH Beck, Munich 2015, ISBN 978-3-406-66738-1 , § 17, Rn. 154-158.
  22. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 436.
  23. ↑ BGHZ 192, 90 .
  24. ^ BGH, judgment of May 9, 2005, II ZR 287/02 = Neue Juristische Wochenschrift p. 2450.
  25. ↑ Christoph Kumpan: Section 37c WpHG, Rn. 1. In: Adolf Baumbach, Klaus Hopt, Christoph Kumpan, Hanno Merkt, Markus Roth (eds.): Commercial Code: with GmbH & Co., commercial clauses, banking and stock exchange law, transport law (without maritime law) . 37th edition. CH Beck, Munich 2015, ISBN 978-3-406-67985-8 .
  26. ↑ Katja Langenbucher: Causality Relationships When Involving Financial Intermediaries . In: Georg Bitter, Marcus Lutter (ed.): Festschrift for Karsten Schmidt . Publishing house Dr. Otto Schmidt, Cologne 2009, ISBN 978-3-504-38064-9 , p. 1053 (1056-1057) .
  27. ↑ Thomas Möllers: The way to a liability for capital market information . In: JuristenZeitung 2005, p. 75 (78).
  28. ↑ BGHZ 160, 149 .
  29. ↑ BGHZ 160, 134 .
  30. ^ BGH, judgment of June 4, 2007, II ZR 147/05 = New Journal for Company Law 2007, p. 708.
  31. ↑ Renate Schaub: § 823 , Rn. 226. In: Hanns Prütting, Gerhard Wegen, Gerd Weinreich (ed.): Civil Code: Commentary . 12th edition. Luchterhand Verlag, Cologne 2017, ISBN 978-3-472-09000-7 .
  32. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 449.
  33. ↑ Klaus Hopt, Hans-Christoph Voigt: Prospectus and Capital Market Information Liability: Law and Reform in the European Union, Switzerland and the USA . Mohr Siebeck, Tübingen 2005, ISBN 978-3-16-148548-0 , p. 273 .
  34. ↑ Alexander Hellgardt: European law requirements for capital market information liability . In: Die Aktiengesellschaft 2012, p. 154 (165).
  35. ^ Petra Buck-Heeb: Capital Market Law . 8th edition. CF Müller, Heidelberg 2016, ISBN 978-3-8114-4247-4 , Rn. 450
  36. ↑ John Hewicker: Ad hoc publicity: The liability of the Board . Publishing house Dr. Kovac, Hamburg 2005, ISBN 978-3-8300-2041-7 .
  37. ↑ Barbara Grunewald, Michael Schlitt: Introduction to Capital Market Law . 3. Edition. CH Beck, Munich 2013, ISBN 978-3-406-65413-8 , pp. 285 .
  38. ↑ Press portal: Ad hoc practice under criticism ( Memento of May 11, 2003 in the Internet Archive )
  39. ^ Study by André Güttler ( Memento of October 3, 2006 in the Internet Archive ) (PDF; 258 kB)