Original question
Article 12 of the L2D sets the minimum standards for the dissemination of regulated information in order to “ensure that investors, even if situated in a Member State other than that of the issuer, have equal access to regulated information” (first sentence of recital 16 of the L2D). Pursuant to Article 12(4) of the L2D “the issuer (…) shall not be responsible for systemic errors or shortcomings in the media to which the regulated information has been communicated.”
When the issuer uses a service provider for dissemination of regulated information, will the service provider be covered by the definition of media? If not, what kind of recovery procedures for system failures should a service provider have in order to ensure the dissemination of regulated information in a manner ensuring fast access to such information on a non-discriminatory basis as required by article 21(1) of the TD?
Original language
[ESMA31-67-127 TD Q18]
The second sentence of recital 16 of the L2D states: "Issuers should ensure that those minimum standards [for the dissemination of regulated information] are met, whether by disseminating the regulated information by themselves or by entrusting a third party to do so on their behalf." Therefore, a service provider cannot be considered being covered by the exemption of Article 12(4) of the L2D.
Dissemination of regulated information may take place through different ways including entrusting services providers to do so. ESMA considers that issuers are ultimately legally responsible for ensuring that the requirements of Article 21 of the TD are met. Therefore, issuers’ responsibilities in relation to dissemination of regulated information are only fulfilled when information reaches the media, even if a service provider is used to do so.[1] The responsibility under the TD remains within the issuer regardless of any contractual obligation and/or responsibilities that may derive from the contract between the issuer and the service provider.
In its Level 2 Advice (ref. CESR/05-407) ESMA has set out standards for issuers using a service provider. ESMA considers that whenever issuers make use of service providers to meet their obligations under Article 21 of the TD, the issuers should ensure that the service provider meets the requirements set out in paragraphs 47–59 of the Level 2 Advice. Pursuant to these standards, the recovery service of a service provider must be available during the operational hours of the service provider (i.e. 24 hours a day, seven days a week) in order to ensure the timely receipt and dissemination of regulated information to media.
[1] Paragraph 9 of CESR's advice (ref. CESR/05-407).