The Bank of Russia and the Ministry of Finance of Russia adopted a joint information letter dated December 27, 2024 No. IN-02-28/64, 05-01-06/132332 "On the exercise by securities issuers of the right to restrict disclosure (provision) of information on the securities market", in which they provided clarifications on the disclosure of corporate information by securities issuers. The regulators explained that securities issuers have the right to restrict access to certain information if its disclosure may lead to negative consequences, for example, sanctions or other risks for the company.
It should be borne in mind that this is not a general blocking of all information, but a selective restriction of access to sensitive data that can be used against the company. This applies to information such as, for example, corporate governance details, financial statements or other data that can be used as grounds for sanctions.
Regulators noted that, despite the right of issuers to restrict access to certain information, this should not harm the interests of investors and upset the balance between the rights of issuers to protect sensitive information and the rights of investors, shareholders and creditors to access the necessary information.
As the Central Bank of the Russian Federation and the Ministry of Finance of the Russian Federation emphasized, when limiting the disclosure of information, issuers must take into account the real threats of negative consequences for the company.
Thus, the letter provides two specific examples that illustrate legitimate and unreasonable restrictions on information:
Legitimate restriction: The issuer may not disclose information about its corporate governance if the publication of this information may lead to a threat of sanctions or a negative reaction from international counterparties. For example, if certain information about management can be used to impose economic sanctions against the company or its top managers, then in this case the restriction of disclosure will be justified.
Unreasonable restriction: In another case, a company may declare the need to hide information about its financial statements, citing the formal provisions of the resolution. However, if there is no real threat of sanctions and if such information does not constitute a commercial secret, then this restriction will be considered unjustified. In this case, the refusal to disclose data on the company's financial condition violates the rights of investors to access important information.
Regulators have drawn attention to cases where information is not available on official platforms and accredited news agencies, but is posted in other sources. This not only violates the principle of transparency, but also does not help reduce the risk of sanctions. Such behavior is inconsistent with the goals of anti-sanction regulation and contradicts the basic principles of protecting the interests of investors.
The example given in the letter concerns a situation where an issuer decides to restrict access to information on an official resource, such as a company website or an accredited news agency, but posts it in another source, for example, on a non-accredited site. In this case, the issuer actually evades compliance with transparency standards, which may be perceived as an attempt to hide information from public scrutiny. This approach is not effective in preventing sanctions, since the information may still become available through other channels, which in turn raises doubts about the issuer's integrity.
The main conclusion that can be drawn from the letter is that issuers of securities must carefully approach the process of restricting information disclosure. This decision must be based on a real need, and not on a formal opportunity. Issuers are obliged to consider not only the risks of sanctions, but also the rights of investors and other stakeholders to access information that may influence their decisions. It is important that data restrictions do not lead to damage to the functioning of the market and do not violate the principles of fairness and equality of market participants.
Thus, regulators call for a more prudent and balanced approach to information disclosure issues so as not to upset the balance between business interests and investor rights.
Law firm "Nadmitov, Ivanov and Partners" advises on corporate law and legal regulation of securities in Russia and foreign jurisdictions.
Email: info@nplaw.ru
Tel.: +7 (495) 649-87-12