To this, it should be added that the imposition of a duty of disclosure entails costs, and the logic of the matter is that expanding the duty of disclosure will entail increasing them. The increase in costs has implications for the economic interests of the reporting companies and also for the investors on whom the companies are liable to "pass" the costs (Yamin Wasserman, p. 43; Horowitz, at p. 38). This reason, too, justifies not establishing a duty of disclosure that is broader than that required in order to achieve the purposes of the law (for more information, see Paserman-Josephov, 177-180).
- An additional complexity arises in determining the materiality of information where it is "forward-looking" information (See definition In section 32A to the Securities Law; For more on the distinction between "hard information" and "soft information," see Ephraim Abramson: "Forecasts and 'soft information' in the company The public – the duty to disclose and the principles of legal responsibility" law 22 55, 58 (1992); Licht, pp. 125-126). The need to examine the materiality of a future event can also arise where there are objective facts known to the company. This is when the reason for publishing them will be that they indicate a chance of a future event (Ido In praise of the test of expectation: The Principle of Materiality and Dealing with Uncertainty in Securities Law" law Med 477, 484-485 (2014) (hereinafter: Baum); Licht, pp. 125-126; Compare: The Malka Affair, paragraphs 75, 91; The Gabrieli Matter, paragraph 85; Abramson, p. 58).
In summary, it should be said that it is possible to point to two auxiliary tests in an attempt to examine the essence of a future event. The expectancy test (based on the U.S. judgment SEC v. Texas Gulf Sulphur, 401 F.2d 833, 849 (2d Cir. 1968)) and the bright line test (based on the American judgment (Greenfield v. Heublein, 742 F.2d 751, 756–757 (3d Cir. 1984)). The expectancy test examines the nature of the event by weighing two components – the probability of the expected event happening and its expected impact on society (Africa Israel, para. 47). In contrast, the bright line test focuses on identifying concrete characteristics defined by the court in accordance with the nature of the event being examined, which, upon their existence, can be seen as having matured into materiality (Sharon Hanes, "Towards a New Test of Materiality in Securities: Between the Expectation Test and the Bright Line Test", Sefer Salim Gibran 1175, 1178, 4 (Aharon Barak, Muhammad Wattad, Gad Barzilai z"l and Dorit Friedman, eds., 2023)). The American case law finally adopted the expectancy test (in the Basic Inc. judgment v. Levinson, 485 U.S. 224 (1988)), while European regulation has adopted a test similar to the bright line test but more complex, inter alia, due to the components examined within it (for more information, see: Ido Baum & Dov Solomon, When Should You Abstain? A Call for a Global Rule of Insider Trading, 88 U. Cin. L. Rev. 67, 83-88 (2019)).