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Disclosure of inside Information for Nasdaq Riga and First North issuers

Once a company’s shares or bonds are listed on the regulated market of Nasdaq Riga or the alternative market First North, the issuer is legally obligated to disclose internal information – frequently enough called “inside information” – to the public.This requirement is central to maintaining fair and transparent capital markets.

EU Regulations and Market Abuse Prevention

The European Union has established a unified regulatory framework to prevent market abuse.This framework, primarily through the Market abuse Regulation (MAR), places specific obligations on issuers regarding the disclosure of inside information and the development of related documentation. The goal is to ensure all investors have access to material information that could affect the value of a company’s securities.

Market abuse encompasses illegal activities like insider dealing, unlawful disclosure of inside information, and market manipulation. MAR aims to deter these practices and protect the integrity of financial markets.

What Constitutes Inside Information?

Inside information is defined as non-public information that, if made public, would likely have a notable effect on the price of the company’s financial instruments (e.g., shares, bonds). This can include a wide range of events, such as:

• Significant changes in profits or losses
• Mergers and acquisitions
• major contract wins or losses
• Changes in management
• Significant discoveries or developments
• Events that could affect the company’s financial condition

The key is whether the information is precise and sufficiently significant to influence an investor’s decision-making process.

Disclosure Requirements

Issuers must disclose inside information to the public without delay. Nasdaq Riga’s regulations and First North’s rules provide specific guidance on the disclosure process.This typically involves publishing a press release via a regulated information service, such as EVEST or Bloomberg.

The disclosure must be clear,accurate,and complete,allowing investors to make informed decisions. Issuers are also required to maintain records of all inside information and the decisions made regarding its disclosure.

The Role of the Bank of Latvia

The Bank of Latvia plays a crucial role in monitoring issuers and trading of financial instruments. In recent years, the Bank of Latvia has increased its focus on ensuring timely disclosure of regulated information and investigating suspicious market transactions. The Bank of Latvia’s website provides information on its supervisory activities and enforcement actions.

The Bank of Latvia’s monitoring activities include:

• Reviewing issuer disclosures
• Analyzing trading data for unusual patterns
• Investigating potential cases of market abuse

Consequences of Non-Compliance

Failure to comply with disclosure requirements can result in significant penalties, including:

• Fines
• Reputational damage
• Legal action

Issuers must prioritize compliance with these regulations to maintain investor confidence and the integrity of the market