ESMA's COVID-19 Related Recommendations for Financial Market Participants

On March 11, the European Securities and Markets Authority ("ESMA") published a set of novel coronavirus ("COVID-19") related recommendations for European financial market participants that CONSOB—the Italian securities market regulator—has brought to the attention of Italian listed issuers on March 12.

In light of the ESMA recommendations, the Boards of Italian listed issuers should consider the following:

  • Business Continuity Planning. Having COVID-19 related contingency plans in place, including deployment of business continuity measures, to ensure operational continuity while complying with applicable statutory and regulatory requirements and restrictions.
  • Market Disclosure. Disclosing to the market material information concerning the impacts of COVID-19 on their fundamentals, prospects, or financial situation as soon as possible, in compliance with the disclosure requirements set forth by the Market Abuse Regulation (EU) No. 596/2014 and the relevant guidance issued by ESMA and by CONSOB, including in respect of profit warnings, to the extent applicable.
  • Financial Reporting. Including a disclosure on the actual and potential impacts of COVID-19 on their business activities, financial condition, and economic performance in their 2019 annual financial statements (presumably, in the notes regarding material events that occurred after the end of the fiscal year and in the report on operations), if these have not been approved by the Board of Directors yet.

Additionally, the Boards of Italian listed issuers that publish non-financial statements under Directive 2013/34/EU or Sustainability Reports should consider including a specific disclosure regarding COVID-19 related risks and the contingency plans and other measures put in place by the issuer to address those risks and manage their impact on the issuer's key stakeholders (e.g., employees, customers, suppliers, and local communities).

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