Recent Updates to SIX Rules on Ad Hoc Publicity
During the summer break, the Issuers Committee of SIX Exchange Regulation (SER) updated its Circular No. 1 (Circular No. 1) on ad hoc publicity. The updates of June 28, 2023 relate mainly to the duty to label ad hoc announcements as such («flagging») and the content of ad hoc announcements. Similarly, SER has published several communiqués over the course of the last year providing guidance on its practice and interpretation of the applicable rules.
Under the ad hoc publicity rules, ad hoc announcements must be «flagged» as such. The updated Circular No. 1 reiterated the principle that it is not permitted to flag «pure marketing announcements» or mere repetitions of previously published price-sensitive facts as ad hoc announcements. In addition, the Circular No. 1 introduced a new paragraph stating that the «mixing of price-sensitive facts with pure marketing announcements in an ad hoc announcement is not permitted». These statements raise a number of important questions, which we will discuss below.
Relatedly, SER’s Communiqué 4/2022 dated July 7, 2022 pointed out that «important» facts such as updates to the financial calendar or invitations to and results of general shareholders meetings must not be published as ad hoc announcements unless those facts are indeed price-sensitive, which must be assessed by the issuer in an ex ante case-by-case analysis.
There are several key take-aways from the above:
- As regards the scope of ad hoc announcements, SER seems to be raising the bar. The old practitioner’s rule of «in doubt, pro ad hoc» no longer applies. Information, even if it is important for all market participants, must not be disseminated in an ad hoc announcement unless the issuer concludes ex ante that the information in this specific case qualifies as price-sensitive fact as defined in the SIX rules. For example, the results of a general shareholders meeting that approves all non-controversial proposals of the board of directors are – absent special circumstances – not price-sensitive and must therefore not be published as an ad hoc announcement.
- It may no longer be permissible to include both price-sensitive facts and other information in the same ad hoc announcement (no «mixing»).
- While the updated Circular No. 1 declares the mixing of a pure marketing announcement with price-sensitive facts to be inadmissible, we believe that a more differentiated approach is warranted. The content of ad hoc announcements must comply with the SIX rules, which provide that ad hoc announcements must not only be factual and clear, but also complete, and be «formulated in such a way that the reasonable market participant can form an opinion as to the extent to which the content is price-sensitive» (15 paras. 1 and 2 Directive Ad hoc Publicity, DAH).
- Accordingly, any additional information in the ad hoc announcement that is necessary or helpful for the market participant to analyze and comprehend the price-sensitive fact must be permissible. Such additional information must have a factual connection (Sachzusammenhang) with the price-sensitive fact and allow market participants to fully assess the content of the ad hoc announcement without recourse to other sources.
- To give a few examples, in line with the above principle, earnings releases may contain prose commentary (be it a quote from the CEO or otherwise) or detailed financial information in addition to the price-sensitive headline figures. Ad hoc announcements of M&A transactions may contain background information as to the transaction, its rationale and expected benefits, the parties involved etc. Finally, ad hoc announcements of clinical trial results may contain detailed information on the relevant study and product, its benefits for the patients, potential indications etc. The general «about [issuer]», «about [counterparty]» or «about [product]» information, «for more information» or similar links, contact details, information on upcoming investor relations or other key dates as well as similar information at the bottom of press releases may in our view also continue to be included in ad hoc releases.
- Financial announcements such as the annual results that are «per se» price-sensitive (art. 4 para. 2 DAH) may contain all information that is also included in the report, whether or not this particular information is in fact price-sensitive.
- Announcing two or more price-sensitive facts in one ad hoc announcement continues to be permissible. For example, a transaction signed on the same date as the earnings release may be announced in (or together with) the earnings release.
- While a mere repetition of price-sensitive facts that have already been disseminated in an ad hoc announcement is – of course – not permitted, it is still permissible to repeat such facts in subsequent ad hoc announcements about new price-sensitive facts if necessary or helpful for the context. For example, an ad hoc announcement of the (price-sensitive) closing of a transaction may again include the key facts already published in the ad hoc announcement of the signing.
- Although the Circular No. 1 now states that the flag «must show the wording specified in the LR», i.e., «Ad hoc announcement pursuant to Art. 53 LR», it continues to be permissible to spell out the referenced legal basis (e.g., «Listing Rules» instead of «LR») or include a reference to the SIX Swiss Exchange (which may be helpful for companies with multiple listings). Accordingly, SER has not amended its FAQ dated January 1, 2022 on this point.
Overall, issuers will have to analyze (more) carefully in the future what information can (or must) be included in ad hoc announcements and what information must be published in separate «normal» press releases.
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Further Information and Useful Links
The updated Circular No. 1 of the Issuers Committee dated June 28, 2023 specifies the revised provisions. SER’s guidelines (formerly: commentary) on the ad hoc-publicity directive dated March 21, 2022 as well as its Answers to Frequently Asked Questions (FAQ) dated January 1, 2022 provide helpful guidance for the interpretation of the rules.
This Bulletin expresses general views of the authors as of the date of this Bulletin, without considering any particular fact pattern or circumstances. It does not constitute legal advice. Any liability for the accuracy, correctness, completeness or fairness of the contents of this Bulletin is explicitly excluded.