Market soundings: the interaction between securities regulation and company law in the United Kingdom and Italy

Mucciarelli, Federico; Lombardo, Stefano

Abstract

Before deciding on operations involving share issuance or sale, companies or shareholders may seek to disclose information to selected investors, in order to gauge their opinion on the envisaged market operation. Despite such “market soundings” risk violating the prohibition of insider trading, selective disclosures have been partially accepted in several European jurisdictions. Market soundings have been eventually regulated in the MAR, which clarifies under which circumstances they are allowed and the position of the involved parties. This article analyses the rules on market soundings in the MAR with regard to issuance in the secondary market and accelerated bookbuildings. In this context, the question arises of whether harmonised rules on market soundings are compatible with national company law regimes. To address this issue, it will be assessed how Italian and English company law regimes react towards selective disclosures. It will be shown that a tension may still exist between uniform rules on market abuses and national company law rules, mostly with regard to directors’ duties and liabilities.

Citation

Mucciarelli, F., & Lombardo, S. (2019). Market soundings: the interaction between securities regulation and company law in the United Kingdom and Italy. European Company and Financial Law Review, 16(3), 310-348. https://doi.org/10.1515/ecfr-2019-0012

• Journal Article Type: Article
• Acceptance Date: Dec 21, 2018
• Online Publication Date: Jun 12, 2019
• Publication Date: Jun 5, 2019
• Deposit Date: Feb 11, 2019
• Publicly Available Date: Feb 11, 2019
• Journal: European Company and Financial Law Review
• Print ISSN: 1613-2548
• Electronic ISSN: 1613-2556
• Publisher: De Gruyter
• Peer Reviewed: Peer Reviewed
• Volume: 16
• Issue: 3
• Pages: 310-348
• DOI: https://doi.org/10.1515/ecfr-2019-0012
• Keywords: MAR; market soundings; insider trading; company law; securities regulation; European Union; Italy; United Kingdom