Since the Regulation (EU) No 596/2014 (referred to as “MAR”) came into force, one of the key concepts has been the “reasonable investor”. The interpretation of this term determines a lot of important follow-up questions such as which information would be likely to have a significant effect on prices of financial instruments as referred to in Article 7 (4) MAR. However, it remains unclear to this day how the term “reasonable investor” shall be interpreted in this context. In contrast to the Directive 2005/29/EC where the legislator explicitly states in Recital 18 that the average consumer test is not a statistical test and the term “average consumer” shall rather be interpreted in accordance with the case law of the European Court of Justice, the MAR remains silent on the concept of the reasonable investor. Although the “reasonable investor” is one of the key concepts of European Market Abuse law, there is still a great amount of uncertainty when it comes to the interpretation of this term.

The presentation by David Bartlitz (Paderborn University) adressed this legal uncertainty be  examining the term “reasonable investor” from an empirical perspective. His key idea is to conduct an event study on ad hoc announcements with respect to certain stocks. In doing so, David Bartlitz is merging relevant announcements into case groups with the aim to gain economic and legal insights about their significance with regard to price effects.