LONDON, May 29 (Reuters) - Companies should not share

market sensitive information with external analysts ahead of

financial statements, the European Union's securities watchdog

said on Wednesday, in its first such warning.

The European Securities and Markets Authority (ESMA) said

companies should be aware of EU laws for preventing market

abuses when holding "pre-close calls" with selected analysts.

These refer to communications, before the publication of

financial statements, between a company and analysts who

generate research, forecasts and recommendations on the

company's shares and bonds.

"ESMA considers that 'pre-close calls' carry inherent risks

of inadvertent unlawful disclosure of inside information

increased by the lack of publicity of these events and the

absence of records of what was presented," the regulator said in

a statement.

"Consequently, issuers should only share non-inside

information during these 'pre-close calls'," it added.

ESMA noted recent media reports suggesting a connection

between episodes of high volatility in share prices and

'pre-close calls'.

Reuters reported in October 2023 that shares in German

carmaker Porsche rose after a broker said the message from a

pre-close call was "neutral to positive".

Shares in Volkswagen rose strongly in January, which traders

linked to a pre-close call ahead of results, Reuters reported.

ESMA said "good practice" shown by some companies include

public disclosure of upcoming calls, making material discussed

in calls available simultaneously on the website, recording the

calls and making them available to regulators on request, and

keeping records of information disclosed.

The EU's market abuse rules are policed by national

securities watchdogs, and sanctions can include fines for

individuals and companies.