Extraordinary Opening of Trading Windows and ongoing MAR Disclosure Requirements - COVID-19

Dato 18 mar. 2020
Download PDF version PDF


COVID-19 has already had a dramatic impact on the financial markets, and it is certain that for the next couple of weeks, the impact will continue to be substantial. The European Securities and Markets Authority (“ESMA”) has made a number of recommendations, which can be found here.


In the current financial climate, boards of listed issuers on Nasdaq Copenhagen may be considering to open trading windows extraordinarily in connection with announcing trading updates and/or the take down of financial guidance.


Assuming that no inside information exists with the issuer and the insiders as of the time of the relevant company announcement, or, to the extent that such inside information exists, that the trading window will only open to persons who are not in possession of such inside information and persons who are not listed on the permanent insider list or ad-hoc insider list, the extraordinary opening of trading windows may be an option to explore for boards of issuers.


We do however emphasize that the issuers must handle the opening of trading windows with care. The take-down of financial guidance does not make the ongoing duty to disclose inside information without delay when the exceptions available are not relevant. This will be relevant in relation with new material time trading updates, which are unlikely to be subject to any exemptions and will require customary disclosure without delay.


According to the Market Abuse Regulation (“MAR”), Article 19, paragraph 11, every person discharging managerial responsibilities within an issuer is prohibited from trading in the issuer’s shares etc. during a closed period of 30 calendar days before the announcement of an interim financial report or a year-end report required to be made public by the relevant exchange or national law. In addition, the general prohibitions of MAR, Articles 14 and 15 on insider trading and market manipulation, respectively, apply.

In addition, Nasdaq Copenhagen recommends issuers to consider whether to set additional closed trading windows or instead use open trading windows (set out in section 2.4.2 of the “Rules for issuers of shares”).


Accordingly, there are no legal requirements which prohibit the opening of an extraordinary trading window outside the closed period under MAR. Further restrictions are left to the issuer to adopt in internal rules.


The internal rules of an issuer could set out rules regarding the extraordinary opening of trading windows, either allowing for or prohibiting such. In our experience many issuers do in fact have such flexibility in their internal rules.


If an issuer intends to open the trading window extraordinarily, we recommend that the issuer adopt procedures to ensure that no inside information rests with the relevant persons and/or the issuer.


In our opinion, an issuer may decide to open an extraordinary trading window with respect to persons who are not in possession of or have access to inside information, regardless of the fact that such possibility is not specifically included in the internal rules of the issuer. As pointed out above, such a decision must be made on a very careful basis and should be monitored on an ongoing basis.


If you have any questions or would like additional information regarding the legal aspects, please feel free to contact Partner Dan Moalem (dmo@mwblaw.dk), Senior Associate Henning Hedegaard Thomsen (hht@mwblaw.dk) or Junior Associate Jeanette Kjeldgaard Rasmussen (jra@mwblaw.dk). 


The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumes responsibility of any kind as a consequence of any reader’s use of the above as a basis for decision or considerations.