Continuous Disclosure, Periodic Reporting and Financial Statements
What this domain tests
This domain tests the listed company's duty to disclose material information promptly and to publish periodic financial reports. It covers announcements, confidentiality, leaks and the content of financial statements.
Core rules and concepts
- A listed company must disclose material information without delay once it is known, unless a permitted delay applies and confidentiality is maintained.
- Periodic reporting includes annual audited financial statements and interim reports within the timelines set by the CMA rules. Boards are responsible for the accuracy and completeness of those reports.
- Financial statements should comply with the applicable accounting standards and give a true and fair view. Related-party transactions, contingencies, going-concern issues and segment information need proper treatment.
- Selective disclosure to analysts or major shareholders is problematic. If information leaks, the company should act promptly, including announcing or requesting a trading halt where appropriate.
- Social-media and website statements can be regulated communications; they must be accurate, balanced and consistent with formal disclosures.
Worked example
A listed company suffers a major cyber incident that disrupts production. Management hopes to wait until the quarterly report. If the incident is material and precise enough to affect the share price, delay is risky. The company should assess the facts, preserve confidentiality where possible and prepare a prompt, accurate announcement covering known impact and uncertainty.
Traps that cost marks
Do not look for a fixed percentage materiality threshold; materiality is facts-based. Do not assume a leak can be ignored until the next scheduled report. Do not approve financial statements without checking consistency with prior announcements.