An Ad hoc Disclosure is a short-term and immediate publication of material information by listed companies that could potentially have a significant impact on the share price. These announcements serve to ensure transparency on the financial markets and to inform all market participants simultaneously and comprehensively in order to prevent insider trading and unfair market practices.
The most important features of an Ad hoc Disclosure are:
Ad hoc Disclosures are therefore an essential tool to protect the integrity and efficiency of the financial markets and to ensure investor confidence.
The term “ad hoc communication” comes from Latin. “Ad hoc” literally means “for this purpose” or “for this particular occasion”. In this context, “ad hoc” refers to the fact that the announcement is prepared and published specifically and exclusively for a particular circumstance that has suddenly arisen.
In finance, the term has been adopted to describe the way in which listed companies are required to immediately disclose important information that may significantly affect the share price. These announcements are not scheduled or regular, but are made spontaneously and on an as-needed basis, precisely when relevant events or developments occur that are of importance to investors and other market participants.
The use of the term emphasizes the urgency and specificity of the information, which must be communicated promptly and precisely in order to ensure transparency and fairness on the financial markets.
"ad hoc Message" and "ad hoc Report" are not exact synonyms for "ad hoc Disclosure," although they are related concepts. Here is a brief explanation of each term and how they differ:
Ad hoc Disclosure: This term specifically refers to the mandatory, immediate, and public disclosure of significant, price-sensitive information by publicly traded companies. The primary aim is to ensure market transparency and prevent insider trading by providing all market participants with equal access to crucial information at the same time.
Ad hoc Message: This term is broader and can refer to any impromptu or one-off communication that is created for a specific purpose or in response to a particular event. While an ad hoc message can be part of an ad hoc disclosure, it is not limited to the context of financial markets or regulatory requirements.
Ad hoc Report: An ad hoc report typically refers to a custom report generated to address a specific issue or query, often on an as-needed basis. These reports are common in business and IT contexts and are not necessarily related to the disclosure requirements in financial markets. They provide detailed information tailored to specific needs or questions, often for internal use.
This table outlines the key differences and contexts for ad hoc disclosure, ad hoc messages, and ad hoc reports.
| Aspect | Ad hoc Disclosure | Ad hoc Message | Ad hoc Report |
|---|---|---|---|
| Definition | Mandatory, immediate, and public disclosure of significant, price-sensitive information by publicly traded companies. | Any impromptu or one-off communication created for a specific purpose or in response to a particular event. | A custom report generated to address a specific issue or query, often on an as-needed basis. |
| Purpose | Ensures compliance with financial regulations and market transparency. | General communication for any specific purpose or event. | Provides detailed information tailored to specific needs or questions, often for internal use. |
| Context | Primarily used in the context of financial markets and regulatory compliance. | Can be used in any context where specific, one-off communication is needed. | Commonly used in business and IT for specific, detailed information needs. |
| Regulatory | Requirement Yes, typically mandated by financial regulatory authorities. | No, not necessarily governed by regulations. | No, usually not subject to regulatory requirements. |
| Examples | Immediate disclosure of earnings reports, Announcements of mergers or acquisitions, Profit warnings or significant changes in financial forecasts | Communication about a sudden change in company policy, Message to stakeholders regarding an unexpected event, Urgent internal communication about a system outage | Custom sales report for a specific quarter, Detailed analysis report for a particular business issue, Custom IT performance report generated for troubleshooting |
Ad hoc Disclosures are of central importance to the financial world for several reasons:
Examples of price-sensitive information that could be contained in Ad hoc Disclosures:
Overall, Ad hoc Disclosures are an indispensable tool for the functioning and stability of the financial markets by ensuring transparency, fairness and integrity.
Important terms relating to
ad hoc disclosures explained
| Ad hoc Disclosures | A short-term and immediate publication of material information by listed companies that can significantly influence the share price. |
|---|---|
| Insider Information | Information of a precise nature which has not been made public and which, if it were made public, would be likely to have a significant effect on the price of a financial instrument. |
| Market Abuse Regulation (MAR) | A European Union regulation that contains provisions to prevent insider trading and market manipulation and regulates the obligations to publish insider information. |
| Transparency | The principle that all material information must be publicly accessible and equally available to all market participants. |
| Price Relevance | The ability of information to significantly influence the price of a security. |
| Insider Trading | The purchase or sale of securities by persons who, due to their position in the company, have access to non-public, price-sensitive information. |
| Disclosure Obligation | The legal obligation of a company to make certain information available to the public. |
| Issuer | A company or organization that issues securities, such as stocks or bonds. |
| Financial Communication | The way in which a company communicates financial information to the public and investors. |
| Compliance | The adherence to laws, policies and regulations that apply to a company. |
| Price-sensitive Events | Events or developments that can significantly affect a company's share price, such as mergers, acquisitions, profit warnings or significant contract signings. |
| Confidentiality | The obligation to keep inside information secret prior to its official publication in order to prevent insider trading. |
| Securities Regulator | Authorities or organizations that monitor compliance with securities trading regulations and laws, such as BaFin in Germany or the SEC in the USA. |
| Press Release | An official statement issued by a company through media channels to publicly announce important information. |
| Capital Market | The market in which capital is traded in the form of stocks, bonds and other securities. |
| Corporate Governance | The framework of rules, practices and processes by which a company is managed and controlled, including disclosure requirements. |
These concepts form the basis for understanding Ad hoc Disclosures and their significance for the financial markets.
Ad hoc Disclosures follow a structured process to ensure that material information is disclosed promptly and accurately. Here is an overview of the typical steps:
This process ensures that ad hoc disclosures are communicated quickly and correctly to all relevant market participants in order to ensure transparency and fairness on the financial markets.
Ad hoc Disclosures are important instruments of financial market communication and must therefore be published in an easily accessible and timely manner. Here are the most important points where you can find ad hoc disclosures.
The following diagram shows an overview of the places where you can find Ad hoc Disclosures.
Ad hoc disclosures are indispensable sources of information for investors and market participants. They are published immediately and are accessible through a variety of channels, including stock exchange information systems, company websites, press releases, financial news services, regulatory platforms and financial portals. This variety of sources ensures that all market participants are informed simultaneously and comprehensively.
Advantages & Disadvantages
of Ad hoc Disclosures
| Aspect | Advantages | Disadvantages |
|---|---|---|
| Transparency | Increases the transparency of the financial markets, as all relevant information is publicly accessible. | Can lead to information overload if too many or insignificant announcements are published. |
| Investor protection | Protects investors from insider trading by informing all market participants at the same time. | Rapid publication can lead to incomplete or misleading information. |
| Market integrity | Strengthens the integrity and fairness of markets by creating a level playing field. | Incorrect disclosures can undermine confidence in the company and the market. |
| Price relevance | Enables investors to make informed decisions based on current and complete information. | Short-term price movements due to announcements can lead to increased volatility. |
| Compliance | Helps companies meet legal requirements and avoid legal consequences. | High administrative effort and costs for preparation and publication. |
| Reputation | Can strengthen a company's reputation by being perceived as transparent and trustworthy. | Negative information must also be published, which can damage the company's image. |
This table provides an overview of the main advantages and disadvantages of Ad hoc disclosures in the context of the financial markets.
Ad hoc disclosures are subject to specific legal regulations in many countries to ensure that material information is published promptly and transparently. Here are some of the most important legal bases concerning Ad hoc Disclosures:
Here are some of the most important legal bases concerning Ad hoc Disclosures:
| European Union | Market Abuse Regulation (MAR) | Regulation (EU) No 596/2014 on market abuse regulates the publication of inside information and ad hoc disclosures in the EU. Article 17 of the MAR obliges issuers to publish inside information immediately in order to prevent market manipulation and insider trading. |
|---|---|---|
| Germany | Securities Trading Act (WpHG) | In Germany, the Securities Trading Act regulates the obligations to publish insider information. § Section 15 WpHG (now replaced by MAR) specifies the requirements for Ad hoc Disclosures and the obligations of issuers. |
| BaFin circulars | The German Federal Financial Supervisory Authority (BaFin) regularly issues circulars explaining the application of MAR and other regulations relating to Ad hoc Disclosures. | |
| United States | Securities Exchange Act of 1934 | In the USA, the Securities Exchange Act of 1934 regulates the disclosure requirements for listed companies. In particular, Regulation FD (Fair Disclosure) requires that material information be disclosed to all investors at the same time. |
| United Kingdom | Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rules | The FCA implements the requirements of MAR in the United Kingdom and sets out specific guidelines for the publication of Ad hoc Disclosures. |
| Switzerland | Financial Market Infrastructure Act (FMIA) | In Switzerland, the Financial Market Infrastructure Act and the associated ordinance regulate the obligations to publish insider information for listed companies. |
Breaches of the ad hoc publicity obligation can have serious consequences, including
The duty of ad hoc publicity is therefore a key element of market integrity and investor protection by ensuring that all market participants are equally informed and have access to reliable information.
The form and content of an ad hoc disclosure are clearly regulated to ensure that the information is precise, understandable and accessible to all market participants at the same time. Here are the main requirements:
Ad hoc disclosures must be precise, comprehensible and comprehensive in order to meet the requirements of transparency and fairness on the financial markets. It should contain all relevant information that could influence the share price and be published immediately to ensure that all market participants are informed at the same time.
The following is a fictitious example of an Ad hoc Disclosures.
| Headline | “ABC AG announces profit warning for the 2024 financial year” |
|---|---|
| Introduction | ABC AG announces that it is revising its profit forecast for the 2024 financial year downwards due to unexpected market conditions. |
| Main Part | |
| Description of the event or information | ABC AG has reduced its original forecast of an annual profit of EUR 100 million to EUR 60 million. This adjustment is due to a significant decline in demand in the main markets and rising raw material prices. |
| Background information | ABC AG had seen strong demand in the first quarter of 2024, but a combination of global economic uncertainties and unexpected market changes led to a slump in orders in the second and third quarters. |
| Impact | The company expects these market conditions to continue into the fourth quarter, which will continue to impact margins and overall profitability. |
| Contact Information | For further information, please contact: Jane Doe, Head of Investor Relations Phone: +49 123 456 789 Email: investor.relations@abcag.com |
| Disclaimer and legal notice | This release contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied by such forward-looking statements. |
The misuse of Ad hoc disclosures by marketing communications is a serious problem, as it can jeopardize the integrity and transparency of financial markets. Here are the main aspects and consequences of this abuse, as well as measures to prevent and regulate it:
The misuse of ad hoc disclosures through marketing communications poses a serious threat to the integrity of the financial markets. Strict regulation, active monitoring by regulators, internal controls and training are key measures to prevent and regulate this abuse. Companies must ensure that they fulfill their ad hoc disclosure obligations correctly to ensure investor confidence and market fairness.
Ad hoc announcements can be found on the official websites of companies in the Investor Relations section or press releases, via stock exchange information systems such as Xetra, on regulatory platforms such as the Federal Gazette in Germany, as well as on financial news services such as Bloomberg and Reuters. Large financial portals and specialized financial apps also often provide access to the latest ad hoc announcements.
The publication of ad hoc disclosures is intended to prevent certain market participants from gaining an information advantage, which should prevent insider trading and market manipulation. Publication is also intended to ensure that all investors have access to key information at the same time, which promotes transparency and fairness on the financial markets.
An ad hoc disclosure is a short-term and immediate publication of material information by listed companies that can have a significant impact on the share price. These announcements are intended to ensure that all market participants have access to important information at the same time, in order to guarantee transparency and fairness on the financial markets and prevent insider trading.
Ad hoc employees are people who are hired on a short-term and often temporary basis for specific tasks or projects in order to fulfill special, usually urgent requirements. Their employment is usually limited in time and geared to the specific needs of the company, without any long-term commitment or obligation.
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