ESMA recommends action by financial market participants for COVID-19 impact

In March of 2020, the European Securities and Market Authority (“ESMA”) issued a sequence of recommendations to financial market participants in light of the enduring impact of the COVID-19 outbreak on financial markets. The recommendations pertain to business continuity planning, market disclosure, financial reporting and fund management.

In regard to Business Continuity Planning, ESMA recommends that market participants should be prepared to apply contingency plans that ensure operational continuity.

As for Market Disclosure and Financial Reporting, ESMA recommends that issuers should disclose with the utmost urgency any information regarding “impacts of COVID-19 on their fundamentals, prospects or financial situation in accordance with their transparency obligations under the Market Abuse Regulation” and that said impacts should be transparently provided on both a qualitative and quantitative “in their 2019 year-end financial report if these have not yet been finalised or otherwise in their interim financial reporting disclosures”.

Lastly, in what concerns Fund Managers, ESMA recommends that “asset managers should continue to apply the requirements on risk management, and react accordingly”.

Michael-Sean Boniface | [email protected]