Clifford Chance
Inside information: what is 'precise' has just become more uncertain
16 March 2015
The EU market abuse regime regulates the misuse of non-public price-sensitive information which is of a "precise nature" (inside information). To be "precise" information must (i) indicate that circumstances exist or that an event has occurred (or may reasonably be expected to come into existence or occur) and (ii) be specific enough to enable a conclusion to be drawn as to the "possible effect" of those circumstances or that event on the price of the relevant investments.
In FCA v Hannam [2014] UKUT 0233, the UK Upper Tribunal held that for information to meet the second part of the precise test, one would need to be able to draw a conclusion as to the possible direction of any price movement.
The EU Court of Justice (CJEU) has now rejected that approach in its decision in the case of Lafonta v AMF (case C-628/13).
