ESMA tells fin market participants to disclose COVID-19 impact on their fundamentals

Maria Nikolova

Issuers should disclose any relevant significant information about the impact of COVID-19 on their fundamentals, prospects or financial situation.

MiFID II implementation likely to be set back even further

The European Securities and Markets Authority (ESMA), today issued a set of recommendations for financial market participants regarding COVID-19.

Following a Board of Supervisors discussion examining the market situation and contingency measures taken by supervised entities, ESMA recommends to all financial market participants, including infrastructures to be ready to apply their contingency plans, including deployment of business continuity measures, to ensure operational continuity in line with regulatory obligations.

Further, issuers should disclose as soon as possible any relevant significant information concerning the impact of COVID-19 on their fundamentals, prospects or financial situation in line with their transparency obligations under the Market Abuse Regulation.

ESMA also advises issuers to provide transparency on the actual and potential impacts of COVID-19, to the extent possible based on both a qualitative and quantitative assessment on their business activities, financial situation and economic performance. This information should be provided in their 2019 year-end financial report if these have not yet been finalised or otherwise in their interim financial reporting disclosures.

Asset managers are advised to continue to apply the requirements on risk management, and react accordingly.

ESMA, in coordination with National Competent Authorities (NCAs) keeps monitoring developments in the financial markets as a result of the COVID-19 situation. The pan-EU watchdog says it is prepared to use its powers to ensure the orderly functioning of markets, financial stability and investor protection.

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