Getting to grips with new guidelines on alternative performance measures

Getting to grips with new guidelines on alternative performance measures

Darius Lewington, solicitor in the Lexis®PSL Corporate team, looks at what lawyers need to know about the final guidelines on the principles that listed issuers should follow when presenting alternative performance measures (APMs) in documents that qualify as regulated information.

Original news

APM guidelines aim to provide performance transparency,

LNB News 30/06/2015 128

Final guidelines on APMs for listed issuers aim to encourage EU issuers to publish transparent, unbiased and comparable information on their financial performance. The guidelines have been published by the European Securities and Markets Association (ESMA) in order to give users a comprehensive understanding of the performance of APMs. The guidelines are aimed at promoting the usefulness and transparency of APMs included in prospectuses or regulated information. ESMA considers that a common approach to APMs is necessary to ensure consistent, efficient and effective supervisory practices and a uniform and consistent application of the TransparencyDirective 2004/109/EC (TD) and by extension the Market Abuse Directive 2003/6/EC (MAD).The guidelines will apply from 3 July 2016.

What is the background to the guidelines?

In February 2014, ESMA issued its consultation paper on guidelines on APMs to replace the Recommendation on APMs

issued in 2005 by the Committee of European Securities Regulators (ESMA's predecessor body) to tackle concerns about APMs used by issuers. ESMA believed that some APMs were being used in a way that presented a confusing or optimistic view of their performance by removing certain negative aspects, or where that was not the case, APMs could have been misleading if they were inconsistently calculated or presented.

Which entities do the guidelines apply to?

The guidelines apply to:

  • issuers (other than States), whose securities are admitted to trading on a regulated market and who are req

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About the author:
Jenisa is Head of Market Tracker, a transaction analysis product that sits within Lexis®PSL Corporate. She has over 13 years of legal publishing experience, with a focus on researching and reporting on trends and developments in the corporate and commercial legal market. Previous roles include content developer for Lexis®PSL, Legal Podcaster at Informa, and Research Editor at Practical Law Company where she specialised in reporting on cross-border corporate and commercial developments from the firm’s New York office.