1.

The primary aim of European legislation on market abuse is to ensure a capital market with integrity and equal rights for investors. This is intended to create investor confidence, which in turn plays a key role in the economic functioning of the market. ( 2 ) Insider dealing law, as a key component of legislation on market abuse, helps to achieve this goal by ensuring that all market participants are on an equal footing. No investor should profit from relevant, but not publicly available, information to the detriment of other investors who are not (cannot) be aware of it. ( 3 )

2.

Therefore, insider dealing law provides, first, that the relevant information should, in principle, be made public as soon as possible, by obliging an issuer of securities to regularly publish information concerning that issuer (known as ad hoc disclosure). ( 4 ) Secondly, any information asymmetry that should arise must not be exploited (prohibition on insider dealing), ( 5 ) and must be kept in as restricted a circle as possible (prohibition on unlawful disclosure of inside information). ( 6 )

3.

This request for a preliminary ruling concerns, in essence, the prohibition on disclosing inside information and the limits of that prohibition. In the main proceedings, a financial journalist is opposing a penalty imposed on him for having allegedly disclosed inside information, essentially claiming an infringement of his press freedom. Given that the aim of insider dealing law is to create as much transparency as possible, it seems desirable for inside information to be handled by journalists at least to some extent, including under that law. However, insider dealing law may come into conflict with the freedom of the press and the freedom of expression in the media, in particular at the stage before information is widely disseminated and published in the media. How to resolve such a conflict is the subject of the second set of questions referred to the Court by the Cour d’appel de Paris (Court of Appeal, Paris, France).

4.

However, this Court must first consider the question of whether the disclosure of which the applicant is accused did in fact involve inside information. When considering the first set of questions referred, the Court will have to clarify in this regard under what circumstances a market rumour, that is to say manifestly uncertain information, can trigger the mechanisms of insider dealing law.

5.

Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) (‘the MAD’), ( 7 ) defines the concept of ‘inside information’ in point 1 of Article 1.

‘… information of a precise nature which has not been made public, relating, directly or indirectly, to one or more issuers of financial instruments or to one or more financial instruments and which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments.’

6.

According to point (c) of the second subparagraph of Article 2(1), Member States shall prohibit any person who possesses inside information, by virtue of his or her having access to that information through the exercise of his or her employment, profession or duties, from using that information by acquiring or disposing of, or by trying to acquire or dispose of, for his or her own account or for the account of a third party, either directly or indirectly, financial instruments to which that information relates.

7.

In addition, under Article 3 of the MAD, Member States must prohibit any person subject to the prohibition laid down in Article 2 from:

8.

The first two recitals of Commission Directive 2003/124/EC of 22 December 2003 implementing Directive 2003/6/EC of the European Parliament and of the Council as regards the definition and public disclosure of inside information and the definition of market manipulation (‘Directive 2003/124’) ( 8 ) read:

9.

Article 1 of this directive defines the concept of ‘inside information’ more precisely:

‘1.   For the purposes of applying [point 1 of Article 1 of the MAD], information shall be deemed to be of a precise nature if it indicates a set of circumstances which exists or may reasonably be expected to come into existence or an event which has occurred or may reasonably be expected to do so and if it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of financial instruments or related derivative financial instruments.

2.   For the purposes of applying [point 1 of Article 1 of the MAD], “information which, if it were made public, would be likely to have a significant effect on the prices of financial instruments or related derivative financial instruments” shall mean information a reasonable investor would be likely to use as part of the basis of his investment decisions.’

10.

Regulation No 596/2014 (‘the MAR’) replaced the MAD and, pursuant to its Article 39(2), has been applicable in the Member States since 3 July 2016.

11.

Recital 77 of this regulation states:

‘This Regulation respects the fundamental rights and observes the principles recognised in the Charter of Fundamental Rights of the European Union (“the Charter”). Accordingly, this Regulation should be interpreted and applied in accordance with those rights and principles. In particular, when this Regulation refers to rules governing the freedom of the press and freedom of expression in other media and the rules or codes governing the journalist profession, account should be taken of those freedoms as guaranteed in the Union and in the Member States and as recognised pursuant to Article 11 of the Charter and to other relevant provisions.’

12.

The definition of inside information in Article 7(1)(a) of the MAR corresponds to that in Article 1(1) of the MAD.

13.

Article 7(2) and (4) of the MAR read, in extract, as follows:

‘2.   For the purposes of paragraph 1, information shall be deemed to be of a precise nature if it indicates a set of circumstances which exists or which may reasonably be expected to come into existence, or an event which has occurred or which may reasonably be expected to occur, where it is specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of the financial instruments or the related derivative financial instrument, the related spot commodity contracts, or the auctioned products based on the emission allowances. In this respect in the case of a protracted process that is intended to bring about, or that results in, particular circumstances or a particular event, those future circumstances or that future event, and also the intermediate steps of that process which are connected with bringing about or resulting in those future circumstances or that future event, may be deemed to be precise information.

…

4.   For the purposes of paragraph 1, information which, if it were made public, would be likely to have a significant effect on the prices of financial instruments, derivative financial instruments, related spot commodity contracts, or auctioned products based on emission allowances shall mean information a reasonable investor would be likely to use as part of the basis of his or her investment decisions. …’

14.

Article 10(1) of the MAR sets out, under the heading ‘Unlawful disclosure of inside information’:

‘For the purposes of this Regulation, unlawful disclosure of inside information arises where a person possesses inside information and discloses that information to any other person, except where the disclosure is made in the normal exercise of an employment, a profession or duties. …’

15.

Article 14(c) of the MAR stipulates that the unlawful disclosure of inside information constitutes a prohibited act.

16.

Article 21 of the MAR, headed ‘Disclosure or dissemination of information in the media’, reads as follows:

‘For the purposes of [Article 10], where information is disclosed or disseminated and where recommendations are produced or disseminated for the purpose of journalism or other form of expression in the media, such disclosure or dissemination of information shall be assessed taking into account the rules governing the freedom of the press and freedom of expression in other media and the rules or codes governing the journalist profession, unless:

17.

Article 1(1) of the MAD and Article 1 of Directive 2003/124 were reproduced almost word for word in Article 621‑1 of the Règlement général de l’AMF (General Regulation of the AMF; ‘the RGAMF’), and thus implemented in French law.

18.

Article 622‑1 of the RGAMF provides that any person referred to in Article 622‑2 thereof must refrain from using the inside information in his or her possession and from disclosing that information to another person outside the normal course of his or her employment, profession or duties. Article 622‑2 of the RGAMF applies to, inter alia, any person who possesses inside information as a result of his or her access to information by reason of his or her employment, profession or duties.

19.

Mr A, the applicant in the main proceedings, is a retired journalist who worked for several British daily newspapers during his professional career. Most recently, he worked for the widely read website of a British newspaper, on which he regularly published articles relaying market rumours. Two of these articles are relevant to the main proceedings.

20.

First, on the evening of 8 June 2011, the applicant in the main proceedings published an article relating to a possible takeover bid by a group for stock in an undertaking at a specifically indicated price, with an 86% premium as compared with the undertaking’s closing day price. The share price of the alleged target undertaking increased by 0.64% at market opening on the next trading day, and then by 4.55% during the course of the session.

21.

Secondly, on the evening of 12 June 2012, the applicant published an article about another possible takeover at a specific purchase price with an 80% premium as compared with the closing day price of the alleged target undertaking. The share price of this undertaking had risen by 17.69% when the markets closed on the next trading day. The undertaking concerned denied the rumour two days later.

22.

Shortly before these two articles appeared on the website of the newspaper concerned, several persons resident in the United Kingdom had purchased the respective shares and sold them the next day at a profit.

23.

An analysis of telephone communication records allowed the Autorité des marchés financiers (French Financial Markets Authority; ‘the AMF’) to establish that the applicant in the main proceedings had telephone contact with one or more of the subsequent purchasers on the day that the articles were published. Those persons are financial analysts with whom the applicant in the main proceedings had been in regular contact for years, exchanging information relating to the capital market. In at least one case, shortly after the end of the telephone conversation with the applicant in the main proceedings, the person concerned called her broker, who then placed a buy order for the securities discussed in the articles that were published shortly afterwards.

24.

The AMF alleges that the applicant in the main proceedings informed the aforementioned persons about the forthcoming publication of the articles during the telephone conversations in question. It takes the view that information relating to the forthcoming publication of a press article relaying a market rumour could constitute inside information, and that the information at issue satisfied the conditions for classification as inside information. On that ground, after consulting with its Penalties Commission, it imposed a financial penalty of EUR 40000 on the applicant in the main proceedings. The purchasers of the securities concerned received financial penalties for insider dealing.

25.

The action against that decision is pending before the referring court, the Cour d’appel de Paris (Court of Appeal, Paris).

26.

In the action, the applicant denies having discussed the articles about the takeover rumours with the subsequent purchasers and claims that the information about the forthcoming publication of these articles could not in any case be considered to be inside information. He argues that mere rumours lack the necessary precision due to their inherent uncertainty and inexactness, and that the precise nature of information is defined as an independent requirement for classification as inside information by Article 1(1) of the MAD and Article 7(1)(a) of the MAR. In particular, in his view, the precision requirement is not rendered obsolete if the information is classified as price-sensitive. In addition, the applicant’s penalty constituted an infringement of Article 21 of the MAR, which provided an exception from the prohibition on disclosing inside information for journalists, and applying this exception to his situation must lead to the annulment of the financial penalty imposed on him.

27.

The referring court takes the view that the significant fluctuations in the price of the securities following the publication of the articles concerned in particular demonstrated that the information in question constituted price-sensitive information within the meaning of Article 1(2) of Directive 2003/124 and Article 7(4) of the MAR. However, it considers not clear whether the information about the forthcoming publication of the articles meets the precision criterion, because the content of the articles – that is to say the reference to a market rumour – is potentially not specific enough.

28.

Regarding the application of Article 21 of the MAR, the question for the referring court is whether the applicant’s activities in the main proceedings were ‘for the purpose of journalism’ within the meaning of that provision and whether that provision contains an exhaustive set of special rules in that regard. As regards the general exception to the prohibition on the disclosure of inside information for professional purposes, the Court required that the disclosure of inside information must be strictly necessary for the exercise of that profession and must comply with the principle of proportionality. ( 9 ) In the referring court’s view, it is therefore necessary to clarify which requirements are laid down in Article 21 of the MAR, if appropriate in conjunction with Article 10(1) of the MAR, in relation to the lawfulness of the conduct of the applicant in the main proceedings.

29.

Against this background, the Cour d’appel de Paris (Court of Appeal, Paris) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling under Article 267 TFEU:

‘(1)   

(2)   In the second place, if the first question is answered to the effect that information such as that at issue can satisfy the necessary requirement of precision:

(3)   In the third place, are Articles 10 and 21 of the MAR to be interpreted as meaning that, even where inside information is disclosed by a journalist “for the purpose of journalism” within the meaning of Article 21, the lawful or unlawful nature of the disclosure requires an assessment of whether the disclosure was made “in the normal exercise of … the profession [of journalist]” for the purposes of Article 10?

(4)   In the fourth place, is Article 10 of the MAR to be interpreted as meaning that, in order to occur in the normal exercise of the profession of journalist, the disclosure of inside information must be strictly necessary for the exercise of that profession and must comply with the principle of proportionality?’

30.

The applicant in the main proceedings, the AMF, the French Republic, the Kingdom of Norway, the Kingdom of Sweden, the Kingdom of Spain and the European Commission submitted their observations on the questions referred for a preliminary ruling in the written procedure before the Court. With the exception of the Kingdom of Norway, all parties concerned also participated in the hearing on 22 June 2021.

31.

With its questions referred, the Cour d’appel de Paris (Court of Appeal, Paris) seeks to clarify whether the applicant in the main proceedings rightly received a financial penalty for infringing the prohibition on disclosure under Article 622‑1 of the RGAMF. ( 10 ) That provision essentially transposed Article 3(a) of the MAD into French law.

32.

With Questions 1(a) to (c), the referring court would first like to ascertain whether information relating to the forthcoming publication of a press article relaying a market rumour can be considered ‘inside information’ within the meaning of point 1 of Article 1 of the MAD, ( 11 ) and thus in principle fall under the prohibition on disclosure set out in Article 3(a) of the MAD (see section A). Questions 2 to 4 then relate to the exceptions to the prohibition on disclosing inside information, specifically in the particular context of journalistic activities (see section B).

33.

By its first question, the referring court would essentially like to know whether and under what conditions information relating to the imminent publication of a press article relaying a market rumour is to be regarded as precise within the meaning of point 1 of Article 1 of the MAD and Article 1(1) of Directive 2003/124.

34.

The requirement of precision is the first of four conditions set out in point 1 of Article 1 of the MAD which have to be fulfilled for information to be considered inside information. Secondly, this information must not have been made public. Thirdly, it must relate, directly or indirectly, to one or more financial instruments or their issuers. Fourthly, it must be information which, if it were made public, would be likely to have a significant effect on the prices of those financial instruments or on the price of related derivative financial instruments (‘price-sensitive’). ( 12 )

35.

In the view of the referring court, the second, third and fourth requirements are fulfilled. Specifically, it assumes that the information concerning the forthcoming publication of the articles was price-sensitive within the meaning of the fourth condition. It bases this finding, in particular, on the fluctuations in the prices of the securities discussed in the article following publication.

36.

The precision requirement has two components according to Article 1(1) of Directive 2003/124. First, the information must indicate a set of circumstances which exists or may reasonably be expected to come into existence or an event which has occurred or may reasonably be expected to do so. Secondly, the information must be specific enough to enable a conclusion to be drawn as to the possible effect of that set of circumstances or event on the prices of financial instruments or related derivative financial instruments.

37.

The referring court easily establishes the first of these two conditions, namely the sufficient likelihood, at the time of disclosure, that the articles would go on to be published. It is thus only the second condition that it considers a problem, that is to say the specificity ( 13 ) of the information in terms of possible effects on prices. In the view of the Cour d’appel de Paris (Court of Appeal, Paris), the fulfilment of this condition might be problematic, because the information at issue, namely the forthcoming publication of the press article, relates to a rumour. There were doubts as to the specificity of that rumour, as it could be considered too imprecise or uncertain to be able to draw conclusions about possible effects on prices. In the view of the referring court, this could have an effect on the specificity of the information at issue. The referring court considers itself thus not in a position to establish whether the information concerned is inside information, even though in its view the information was not publicly known and was price-sensitive, therefore giving those in possession of it an advantage in relation to the other actors on the market. ( 14 )

38.

According to the case-law of the Court, the criterion of specificity, as the second component for determining the precision of inside information, ( 15 ) is, however, a stand-alone condition for establishing the existence of inside information, independent of price sensitivity. ( 16 ) Consequently, it is necessary to first examine whether the information relating to the forthcoming publication of a press article is specific within the meaning of the second alternative in Article 1(1) of Directive 2003/124, despite the fact that it concerned a market rumour (in this regard, see section 1).

39.

Only then, in relation to Question 1(c), will it be necessary to clarify whether the specificity of the information in question can also be demonstrated by the fact that prices increased following publication of the press articles in question (in this regard, see section 2).

40.

It results from the aforementioned definition of the specificity criterion in the second alternative in Article 1(1) of Directive 2003/124 that information must have content or value enabling it to be deemed price-sensitive (or not). ( 17 ) That suggests that the threshold is not intended to be high. ( 18 ) Rather, information should be excluded only if, in light of the price sensitivity assessment, it is deemed to have no relevant informational value from the outset.

41.

According to recital 1 of Directive 2003/124, when assessing price sensitivity, a reasonable investor would take account in particular of information showing the economic impact of a piece of information on a company ( 19 ) and the reliability of that piece of information. On this basis, according to the wording of the Court, the specificity criterion should only exclude information that is vague or general, from which it is impossible to draw a conclusion as regards its possible effect on the prices of the financial instruments concerned. ( 20 )

42.

It is true that information about the forthcoming publication of an article from the author of that article is not vague, as it describes a specific event from a reliable source as certain to occur. However, that information is, in itself, obviously too general to allow a conclusion to be drawn as regards its possible effect on the prices of the financial instruments concerned. Such a conclusion could be reached only in connection with the subject matter of the article concerned – that is to say, in the present case, the market rumour concerning the company takeovers.

43.

The applicant in the main proceedings also makes reference to this connection. He concludes that the information about the publication of the articles can only be specific if the subject matter of the articles themselves is specific. He argues that the content of the articles at issue in the present case was not specific, however, because it concerned rumours, which were by nature non-specific. In that regard, he refers, inter alia, to a statement by the former Committee of European Securities Regulators (CESR), according to which rumours represented the exact opposite of verifiable and thus precise information. ( 21 )

44.

Both claims are, in my view, incorrect.

45.

If market rumours were generally considered to be non-specific, they could never constitute inside information. ( 22 ) However, the MAD does not expressly exclude rumours from insider dealing law. On the contrary, as already explicitly mentioned above, recital 1 of Directive 2003/124 states that ‘the reliability of the source of information’ plays a role when assessing the value of a piece of information. This implies that the directive does not require absolute reliability for classification as inside information, and that reliability is a matter of degree and must be assessed on a case-by-case basis.

46.

Additionally, rumours play a significant practical role in market practice. ( 23 ) Similarly, point 2(c) of Article 1 of the MAD assumes that rumours are processed by the market, as they can create misleading signals which may manipulatively distort prices. In order to achieve the purposes of the directive, namely ensuring investor confidence by placing them on an equal footing in terms of information, ( 24 ) the exploitation of information asymmetry must be prohibited in this field.

47.

This is all the more true given that the reliability of information that is not publicly known is seldom certain. In other words, a lot of information about (future) events could be considered or formulated as rumour until it becomes known or is publicly clarified. As uncertain information cannot in any case be completely excluded from the scope of insider dealing law, difficulties will inevitably arise in establishing how specific that information needs to be. There are therefore no grounds for a generalised exclusion of rumours as non-specific due to their inherent uncertainties. In any case, this cannot create any significant legal certainty. ( 25 )

48.

In addition, if the subject matter of an article lacks specificity, this does not in itself lead to the conclusion that the information relating to its publication is non-specific. As the AMF also rightly points out, this would disregard the fact that the value of information contained in an article may change precisely because it has been published. This is particularly true of rumours, the content of which is often indefinite and the reliability of which depends on the number of persons broadcasting them and the status of these persons. A rumour may thus gain credibility as a result of publication and achieve precision by being set down in writing.

49.

Taking a different approach would also not be consistent with the protective purpose of insider dealing law. This is because, apart from the fact that a rumour may change as a result of its publication, the information about the publication has added value of its own. An investor who is aware of the date of publication of a rumour has an advantage in terms of information, which he or she may exploit to the detriment of other investors.

50.

The connection between publication and the content of an article is thus correctly understood as meaning that the specificity of information such as that at issue in the present case depends on the content of the article in the form it takes upon publication. For it is precisely this – the published content of the article – that is processed by the market and thus forms the basis of an investor’s assessment.

51.

In terms of content, what matters is whether specific economic implications might arise for an issuer as a result of the published rumour. Therefore, to give an example, an article referring to a ‘major’ takeover ‘in the automotive sector’ without naming the undertakings concerned would be considered as too general and thus non-specific. It is true that, in so far as the undertakings concerned can be deduced at least implicitly from the article, mentioning the offer price in the event of a takeover rumour makes the article and therefore the rumour somewhat more specific. However, as public takeovers are regularly accompanied by takeover premiums on the share price, the market can assess the possibility of an effect on prices even in the absence of an offer price. ( 26 )

52.

Whether the reliability of a published rumour can also be inferred from its publication depends on whether criteria for sufficiently determining credibility and believability can be established as a result of publication. Such criteria may consist, first, of a reference to the sources of the rumour in the article. Secondly, the reputation of the journalist and the reputation of the media outlet can also play a role in this regard, ( 27 ) because their publishing such information might imply that it has been sufficiently verified. For example, it is one of the professional obligations of a journalist carefully to examine the veracity of information to be published, ( 28 ) and it cannot be assumed that this duty has been disregarded, particularly by a respected journalist. Other criteria may also be relevant, such as the precision of the wording and content. ( 29 ) Mentioning a specific offer price can again play a role in this regard. When examining specificity, however, it does not (yet) matter whether the information is ultimately reliable enough to form an investment incentive within the meaning of Article 1(2) of Directive 2003/124; it needs only to allow a robust and reasonable assessment.

53.

With Question 1(c), the Cour d’appel de Paris (Court of Appeal, Paris) also seeks to ascertain whether the price fluctuation following publication of the information in question (ex post) is a relevant factor when assessing whether information is sufficiently specific.

54.

Whether or not information is to be considered inside information must necessarily be assessed from an ex ante perspective, as the essential characteristic of inside information is precisely that it is not publicly known. Consequently, when considering whether information is precise within the meaning of the second alternative in Article 1(1) of Directive 2003/124, a subsequent price fluctuation can in principle only be indirectly relevant, specifically if evidence is later provided.

55.

In this sense, recital 2 of Directive 2003/124 provides that a subsequent price fluctuation may be used to verify the presumption that the ex ante information was price-sensitive (but should not be used to take action against someone who drew reasonable conclusions from ex ante information available to him or her). This is because it stands to reason that information was in fact price-sensitive if there was a price fluctuation after publication. ( 30 ) The referring court questions whether that reasoning can also be applied to assessing specificity.

56.

This question would have to be answered in the affirmative if specificity were a necessary precondition for inside information to be price-sensitive. In that case, it would also be possible to conclude that the published information was specific from a subsequent price fluctuation. There seems to be much in favour of this interpretation: according to the definition in Article 1(2) of Directive 2003/124, information is price-sensitive if a reasonable investor would use it as part of the basis of his or her investment decisions. This assumes, at least on the face of it, that the subject matter of this information was such as to make its assessment as relevant to this investment decision possible in the first place. That expressly means that it was sufficiently specific to draw the conclusion that there might be an effect on the prices of financial instruments.

57.

By contrast, the referring court and the applicant in the main proceedings seem to assume that information can be price-sensitive, but nevertheless non-specific. If this were correct, however, such information could not be considered inside information due to the absence of the first precondition under point 1 of Article 1 of the MAD. This approach would consequently lead to certain price-sensitive information, which gives those in possession of it a particular advantage due to this price sensitivity, being excluded from the prohibition on insider dealing. This advantage could thus be exploited without sanction, which would undermine investor confidence in information symmetry. ( 31 ) There does not seem to be any objective reason for this. ( 32 )

58.

However, for the purposes of answering Question 1(c), it is not necessary definitively to establish whether non-specific price-sensitive information may exist, because even if that were the case, the fact remains that a reasonable investor generally bases his or her investment decisions on information that has a certain degree of precision. In other words, price-sensitive information will also be specific, at least in the vast majority of cases. In my view, this circumstance is sufficient to extend the idea contained in recital 2 of Directive 2003/124, according to which a subsequent price fluctuation at most indicates that the information is price-sensitive, to specificity. Since this subsequent proof or verification in no way excludes the requirement to establish the specific facts of the case and in any event to examine, when imposing penalties, whether the information could have been classified as inside information from the ex ante circumstances.

59.

The answer to the first question referred for a preliminary ruling is therefore: Information provided by the author of a newspaper article about the forthcoming publication of that article, which concerns a market rumour relating to a company takeover, fulfils the precision requirement under point 1 of Article 1 of the MAD in conjunction with the second alternative of Article 1(1) of Directive 2003/124, if the subject matter of the article in its published form is sufficiently specific that conclusions can be drawn as regards its possible effect on the prices of one or more financial instruments. This is the case if the publication of the article provides indications which make it possible to assess the reliability of the information contained therein and from which economic implications for the issuer can be inferred. The prominence and reputation of the journalist under whose byline the article appears, the reputation of the media outlet that publishes it and the fact that the article gives a specific price for the takeover bid concerned might also be relevant. Any fluctuation in price following publication of the information concerned can be used within the meaning of recital 2 of Directive 2003/124 to verify the assumption that the ex ante information was specific within the meaning of the second alternative of Article 1(1) of that directive.

60.

If the referring court concludes, applying the aforementioned criteria, that the information about the forthcoming publication of the articles at issue is to be regarded as inside information, the question then arises as to whether the disclosure of this information, that is to say its communication to the persons concerned, was also unlawful and worthy of sanction.

61.

Article 3(a) of the MAD, the provision in force when the event at issue occurred, does not preclude every disclosure of inside information. Rather, it states that the disclosure thereof is prohibited ‘unless such disclosure is made in the normal course of the exercise of [his or her] employment, profession or duties’. That provision is based on the premiss that a categorical prohibition on disclosure would paralyse other important processes. In practice, it is inconceivable that corporate activity could take place without inside information being processed and forwarded to a limited circle of persons within an undertaking (for example, to the relevant departments) or even externally (to lawyers and auditors, for example).

62.

The Court has, however, clarified that the exception to the prohibition on disclosure must be interpreted strictly, and applies only if disclosure is strictly necessary for the exercise of a profession and complies with the principle of proportionality. ( 33 )

63.

A provision with almost identical wording to Article 3(a) of the MAD can today be found in Article 10(1) of the MAR (in conjunction with Article 14(c) of the MAR). In addition, the legislation currently in force provides in Article 21 of the MAR that the rules governing the freedom of the press and freedom of expression in other media and the rules or codes governing the journalist profession must be taken into account when applying Article 10 of the MAR for the purpose of journalism.

64.

In its second to fourth questions referred, the Cour d’appel de Paris (Court of Appeal, Paris) asks how the communication regarding the forthcoming publication of the articles should be assessed in light of the aforementioned provisions; in other words, whether the requirements for an exception from the prohibition on disclosure are fulfilled under these rules.

65.

The legal regime provided for by the MAR for handling inside information in a journalistic context must therefore be clarified. Thus, it must ultimately be determined how the freedom of the press and freedom of expression in the media can be appropriately balanced with protecting market integrity, which is particularly emphasised by the Court in its tendency to interpret strictly the prohibition on disclosure in the course of professional activity. It is therefore appropriate to answer the second to fourth questions together (see section 2).

66.

However, it is first necessary to consider the admissibility of the questions referred for a preliminary ruling, since – as the referring court itself established – the MAR had not yet entered into force when the events at issue in the main proceedings occurred, and the provisions of the MAD applied (see section 1 below).

67.

The referring court takes the view that Article 21 of the MAR is a more favourable provision for journalists than Article 3(a) of the MAD, which was actually in force at the time. It also considers that, in the present context of imposing a penalty, Article 21 of the MAR was applicable to actions completed before its entry into force under the lex mitior principle. ( 34 ) Consequently, the questions concerning Article 21 of the MAR were relevant to the decision in the main proceedings.

68.

It cannot be easily established whether Article 21 of the MAR actually contains a more lenient provision, given that fundamental rights, in particular Article 11 of the Charter and Article 10 ECHR, already had to be taken into account when interpreting and applying Article 3(a) of the MAD. ( 35 ) Rather, this appraisal ultimately depends on the specific interpretation of Article 21 of the MAR. However, since this is precisely the subject of the questions referred for a preliminary ruling, it is in accordance with the requirements of the proper administration of justice to examine them on their merits. ( 36 )

69.

This also applies in relation to Article 10(1) of the MAR, the interpretation of which is expressly requested in the third and fourth questions referred. It is true that Article 3(a) of the MAD contains a comparable provision in this respect – at least in terms of wording – meaning that application of the lex mitior principle can be ruled out, at least on the face of it. However, Article 21 of the MAR makes explicit reference to Article 10, with the provisions forming part of a single set of rules. It is therefore necessary to examine the mutual relationship between the two provisions in order to ensure their proper interpretation.

70.

It follows that examination of the merits of the second to fourth questions referred for a preliminary ruling is admissible.

71.

The second to fourth questions referred concern, first, the applicability of Article 21 of the MAR in the main proceedings. The referring court asks whether disclosure of information relating to the forthcoming publication of an article can be considered to be disclosure of inside information ‘for the purpose of journalism’. Secondly, it questions the relationship between Article 21 and Article 10(1) of the MAR.

72.

The reason for this question is that the applicant in the main proceedings is of the opinion that Article 21 of the MAR represented an exhaustive set of special rules for journalistic activity, and thus that the general requirements concerning the lawfulness of disclosing inside information in a professional context under Article 10 of the MAR did not apply to him. There was therefore no need to examine the requirement of necessity and proportionality of the disclosure of inside information, as established by the Court, ( 37 ) in relation to journalistic activities.

73.

Against that background, the AMF and the French Government in particular have argued in favour of a particularly strict interpretation of the concept of ‘for the purpose of journalism’ in the present proceedings. In their view, this should only cover the publication of the information itself and directly related acts. Providing information about the forthcoming publication of an article would therefore not be covered by this concept, as it is only revealed to a small number of people and is thus neither published nor directly serves the publication of the article concerned.

74.

However, in light of the spirit and purpose of Article 21 of the MAR, such an interpretation of the concept of ‘for the purpose of journalism’ is difficult to justify. If taken to its logical conclusion, it would exclude from the outset a substantial proportion of journalistic activity that takes place prior to actual publication, such as research activities, from the protection relating to the freedom of the press and freedom of expression provided under insider dealing law. However, the scope of application of Article 21 of the MAR must correspond to the protective scope of the freedom of the press and freedom of expression in the media. ( 38 ) That is consistent with the purpose of that regulation, as recital 77 of the MAR demonstrates. According to that recital, any reference to these fundamental rights in the body of the Regulation is intended to ensure that account is taken of those freedoms as recognised in the Charter and in the ECHR.

75.

This is especially true in light of the fact that Article 21 of the MAR would only have relatively limited scope otherwise, because the publication of information in a widely circulated press medium is in any case permitted independently of the application of Article 21 of the MAR. This is because publication of this kind means that the requirement that the information has not been made public no longer applies, meaning that the information can no longer be considered to be inside information. ( 39 )

76.

The European Court of Human Rights (‘the ECtHR’) stresses, in relation to Article 10 ECHR, ( 40 ) the role played by journalism in imparting information and ideas on all matters of public interest. ( 41 ) However, it cannot be concluded from this that, objectively, only the actual publication of information and closely related activities are protected by the freedom of the press. On the contrary, the ECtHR expressly includes activities like research and investigations, which are merely preparation for subsequent dissemination or publication, within the scope of protection. These activities are even adjudged to require special protection. ( 42 ) Against this background, the verification of facts from a source ( 43 ) before their publication, as referred to in Question 2(b), is unquestionably covered by the protective scope of the freedom of the press and freedom of expression in the media and thus by the scope of Article 21 of the MAR. This also applies if the applicant in the main proceedings were to have disclosed, in the context of such a verification, that he was about to publish an article relating to those facts.

77.

According to the AMF, however, the conversations between the applicant in the main proceedings and the subsequent purchasers did not involve verifying information, but were limited to indicating that the publication of an article about the rumour concerned was imminent.

78.

However, an action of this kind may also be covered by the protective scope of the freedom of the press. In this respect, the ECtHR does not require that the action in question directly benefits a particular publication. Therefore, when a journalist who regularly reports on criminal cases requested confidential information from an employee at the public prosecution service, in order to generally keep up to date with investigations without working on a specific publication or research, this was readily considered to be covered by the protective scope of the freedom of the press. ( 44 )

79.

Therefore, to be covered by the protective scope of the freedom of the press and thus the scope of application of Article 21 of the MAR, all that matters is that an action or activity takes place in a journalistic, and not private, capacity. ( 45 ) This requires that that action is connected both objectively and in terms of intention to the journalistic activity of the person concerned. That journalistic activity must, in general, aim to disclose information to the public. However, the action itself need not consist of informing the public.

80.

Consequently, providing information about the forthcoming publication of an article would be considered a disclosure ‘for the purpose of journalism’ within the meaning of Article 21 of the MAR, if the referring court were to conclude that the research activity of a financial journalist in practice involves contact with financial analysts, in the context of which information about forthcoming articles and their publication is also exchanged.

81.

However, a different assessment would be required if the contact in question is not motivated by obtaining information for (future) articles, but has the objective, quite independently of this, of creating or exploiting an information advantage. The referring court must make the factual findings necessary to carry out this assessment. ( 46 )

82.

Another question, separate from that relating to the applicability of Article 21 of the MAR, is whether a journalistic practice of this kind results in a lawful disclosure of inside information. Since, contrary to what is claimed by the applicant in the main proceedings, the fact that the conditions for applying Article 21 of the MAR are fulfilled does not mean that an exception from the prohibition on disclosure applies. That aspect forms the subject matter of the third question referred.

83.

In this respect, it is clear from the wording of Article 21 of the MAR that ‘for the purposes of Article 10 … such disclosure or dissemination of information shall be assessed taking into account the rules governing the freedom of the press and freedom of expression in other media and the rules or codes governing the journalist profession’. Thus, the provision apparently assumes that, where inside information is disclosed for the purpose of journalism, Article 10(1) of the MAR is the relevant provision for assessing the lawfulness of that disclosure. The fundamental rights concerned, like the rules of professional conduct, can only be taken into account in the context of this provision. Accordingly, Article 21 of the MAR does not provide for any independent legal consequence and cannot, for that reason alone, constitute an independent exception to the prohibition on disclosure.

84.

As a consequence, the lawfulness or unlawfulness of a disclosure for the purpose of journalism must, in a second step, be assessed on the basis of whether it was carried out during the normal exercise of the journalistic profession within the meaning of Article 10(1) of the MAR. ( 47 ) This in turn justifies equating the scope of application of Article 21 of the MAR with the protective scope of the freedom of the press and freedom of expression in the media and always assuming that a disclosure of inside information is ‘for the purpose of journalism’ where it takes place in a journalistic capacity. ( 48 )

85.

As is already clear from the considerations above, ( 49 ) examining and proving journalistic purposes can pose difficulties in terms of fact.

86.

According to the general rules, the burden of proof for an infringement of the prohibition on disclosure lies with the competent State authorities. They must therefore also demonstrate that the disclosure was not made for the purpose of journalism. To that end, they must establish the objective circumstances of the offence, on the basis of which the court dealing with the matter can determine whether there is any connection with the journalistic activity of the person concerned or whether there are at least specific indications of such a connection.

87.

In that regard, it is obvious that a court will find it easier to conclude that an action took place for the purpose of journalism if the journalist concerned provides explanations as to how that action forms part of his or her journalistic activity. However, that must not lead to the burden of proof for the existence of journalistic purposes falling on the person concerned. On the contrary, every person concerned has the right to remain silent, including during proceedings relating to an administrative sanction, ( 50 ) the exercise of which should not be to his or her detriment. The presumption of innocence (Article 4(1) of the Charter) also applies to the prosecution of insider dealing offences. ( 51 ) Consequently, a journalist cannot be required to declare anything about the reasons for disclosing the information in question. Lastly, this complies with the requirement to protect journalistic sources.

88.

In cases of doubt, therefore, disclosure ‘for the purpose of journalism’ within the meaning of Article 21 of the MAR can only be excluded for professional journalists either if the objective circumstances of the act have no intrinsic link to their professional activity or, alternatively, if it can be established – using the methods provided for under national law – that the disclosure was made subjectively for non-professional or for personal reasons.

89.

Pursuant to Article 10(1) of the MAR, disclosure of inside information is not unlawful if the disclosure is made ‘in the normal exercise of … a profession’. The question arises here as to whether the scope of Article 21 of the MAR only covers disclosure that is strictly necessary for the exercise of the journalistic profession within the meaning of the Grøngaard and Bang judgment and that complies with the principle of proportionality. ( 52 )

90.

The Grøngaard and Bang case-law, which was originally issued in relation to Article 3(a) of Directive 89/592, ( 53 ) can easily be applied to Article 10(1) of the MAR, because the provisions are drafted in broadly identical terms and the considerations which led the Court to interpret the ‘normal exercise of the profession’ criterion in that way remain relevant. In particular, disclosure of inside information continues to constitute a serious risk to the functioning of the capital markets and investor confidence in those markets, ( 54 ) which means that exceptions to the prohibition on disclosure must remain limited. The importance which the legislature attaches to protecting market integrity is even reinforced by the fact that the system of rules takes on the form of a regulation under the MAR. ( 55 )

91.

However, the referring court questions whether this case-law also applies within the framework of Article 21 of the MAR (in conjunction with Article 10(1) of the MAR). Since the primary function of the press is precisely that of imparting ideas and information on subjects of public interest, ( 56 ) the exercise of the journalistic profession is particularly limited by a strict application of the prohibition on disclosure.

92.

However, contrary to the possibility considered by the referring court in the fourth question referred, it cannot be concluded from this that the strict conditions set out by the Court for an exception to the prohibition on disclosure do not generally apply to journalistic matters. Rather, Article 21 of the MAR shows only that this case-law must be applied in such a way that it does not infringe the freedom of the press and freedom of expression in the media.

93.

In the field of financial journalism, a distinction must be drawn between journalistic activity carried out exclusively within the sphere of interest of the investing public and that which also touches on topics of general political or social interest. This is because, according to the case-law of the ECtHR, there is little scope for restrictions on the freedom of the press when it comes to social or political discussion, ( 57 ) whereas reports of limited public interest cannot carry the same weight. ( 58 )

94.

In line with those criteria, there is a greater need for information and thus an increased public interest in disclosure of corporate misconduct, which often goes hand in hand with a public discussion about economic regulation or possible failures on the part of the State authorities. ( 59 ) This is especially true because companies are more likely not to publish information that reflects badly on them, even if this might infringe the ad hoc disclosure obligation under Article 17(1) of the MAR. The press thus plays a role as ‘public watchdog’. ( 60 ) In order to be able to perform that function effectively, however, it must be given a considerable degree of discretion to process and if necessary disclose inside information.

95.

By contrast, restrictions on disclosing inside information may be more justifiable in the case of statements exclusively concerning a group of investors. It is true that such statements serve the market’s interest in information, which can be considered an independent public interest in light of the objectives of ensuring information efficiency and transparency in capital market law. ( 61 ) However, that interest is already covered by the publicity mechanisms under capital market law. ( 62 ) In the case of company takeovers, as in the present case, publication of the takeover offer by the bidder is also provided for under Directive 2004/25, in addition to the ad hoc publication already mentioned. ( 63 )

96.

For the purposes of applying Article 21 in conjunction with Article 10(1) of the MAR and examining the criteria of strict necessity of disclosure, this means that: according to the case-law of the ECtHR, even when there is a lot of public interest in reporting, it must in any case be ascertained whether there were obvious alternative ways of achieving journalistic objectives. ( 64 )

97.

Moreover, in a case such as the present one, a stricter standard of review can be applied to examine whether the information had already been sufficiently verified, which is, in principle, a matter for the journalist to assess. In any case, it can be examined whether verification could have taken place without mentioning the forthcoming publication of the article. If the referring court were to find that, in notifying his contacts about the publication of the article, the applicant was not seeking verification, ( 65 ) it would have to be examined whether the disclosure for the performance of journalistic duties was strictly essential in another way, in particular whether this was the only way to ensure the flow of information for future articles.

98.

Against this background, it does not seem inconceivable that the referring court will conclude that providing information about the forthcoming publication was not strictly necessary in the present case.

99.

Otherwise, when balancing the freedom of the press with market integrity as part of the proportionality test in the proper sense, on the one hand it would have to consider that insider dealing had taken place due to the disclosure of inside information. ( 66 )

100.

This is because, first of all, this causes real financial damage. Investors who are unaware of the information sell their securities under value or purchase them for more than their worth, depending on the nature of the information. This is detrimental to particularly attentive investors especially, because they react extremely quickly to price fluctuations caused by inside information that cannot be explained any other way. In the medium term, there is also a risk that investors will lose confidence in the market as a whole and will leave. And it is namely those (attentive) investors, who ensure that prices are formed quickly and accurately on the market, who move away. In addition, and as a consequence, there is a risk that the public in general will lose confidence in the functioning of the markets ( 67 ) – confidence that, according to the legislature, will not easily be rebuilt. ( 68 )

101.

On the other hand, when balancing the conflicting interests, the referring court must consider that the press must not generally be deterred from researching or publishing certain themes by the regulation in question or by the application thereof – specifically by the prohibition on disclosure. ( 69 ) The severity of the penalty incurred is particularly significant in that regard. ( 70 )

102.

However, whether the member of the press concerned is eligible for protection in the individual case depends on whether he or she has acted in line with his or her duties and responsibilities. ( 71 ) The question of whether or not he or she has acted lawfully is particularly relevant in this regard, although not decisive. ( 72 ) In a case such as the present one, it might thus be relevant to what extent a journalist – alongside his or her own potentially criminal actions – participated (knowingly) in a third party’s criminal offence, such as insider dealing by a third party.

103.

As regards the potentially deterrent effect ( 73 ) of insider dealing law on financial journalism, the applicant in the main proceedings emphasises that he did not infringe any professional rules which prohibited the disclosure of the forthcoming publication of an article under the given circumstances. ( 74 ) In that regard, however, the referring court must first ascertain whether this makes the applicant’s conduct compliant with journalistic practices. Secondly, in the present context at least, compliance with journalistic codes of conduct does not necessarily allow the conclusion that the disclosure of information was lawful. This is because the professional standards applicable in the Member States only regulate the conflict between the freedom of the press and insider dealing law to some degree, ( 75 ) meaning that the balance between the freedom of the press and the market integrity sought by Article 21 of the MAR could not be achieved by merely complying with the professional codes of conduct governing journalistic activity. Thus, the fundamental guarantees of freedom of the press and freedom of expression remain the decisive factor, the content of which cannot, in any event, be freely determined merely by the legislature or by professional associations.

104.

Accordingly, if conduct which a journalist could regard as lawful solely on the basis of the professional codes of conduct is nevertheless deemed to constitute an infringement of the prohibition on disclosure, this circumstance can be taken into account and no financial penalty imposed. ( 76 ) This contributes to guaranteeing a legally certain framework for journalistic activity in fields relating to the capital market. ( 77 )

105.

In light of all of the above, the answer to the second to fourth questions must be that a disclosure is ‘for the purpose of journalism’ within the meaning of Article 21 of the MAR if that disclosure is made in a journalistic capacity. However, in that case, whether or not the disclosure is lawful also depends on whether it takes place in the normal exercise of a journalist’s employment or profession within the meaning of Article 10(1) of the MAR. This assumes that the disclosure is strictly necessary and complies with the principle of proportionality. When assessing the strict necessity and proportionality of a disclosure for the purpose of journalistic activity, the requirements of freedom of the press and freedom of expression in the media must be weighed against the risks posed by disclosure to the integrity of the capital markets. When examining proportionality, it is necessary on the one hand to consider, in particular, the public interest in the subject matter of the journalism concerned, whether or not the journalist is eligible for protection and the severity of the penalty. On the other hand, it depends, inter alia, on whether the risk of insider dealing was manifest and has materialised in the specific case.

106.

In the light of the foregoing considerations, I propose that the Court answer the questions referred for a preliminary ruling by the Cour d’appel de Paris (Court of Appeal, Paris, France) as follows: