The following obligations apply in respect of ongoing information about major shareholdings. It applies to shares admitted to trading on a regulated market whose home Member States is the State. A person must notify the issuer of the percentage of voting rights he or she holds as a result of the events specified below, the percentage of voting rights which he reaches, exceeds or falls below one or more of the percentages mentioned.
The relevant events are the acquisition or disposal by the person of shares in the issuer, which carry voting rights. The relevant percentages are: 5%, 10%, 15%, 20%, 30%, 50% and 75%. Each such percentage is a “threshold”.
There are disregards in calculating whether a person has an obligation to disclose acquisitions, disposals. They include
- shares acquired for the sole purpose of clearing and settlement within a settlement cycle of a duration of no more than three days;
- shares held by nominees, custodians where the person holds voting rights only under instructions given;
- shares held by a market maker;
- shares held by a credit institution subject to certain conditions;
- shares held by a collateral taker under a collateral transaction,
- shares acquired by a borrower under stock lending agreements as determined by the Central Bank’s rules.
The notification requirements apply to a person to the extent the person is entitled to acquire, dispose of, or exercise voting rights in any of the following cases or in combination:
- voting rights held by a third party with whom that person has concluded an agreement, which obliges them to adopt or by concerted exercise of the voting rights they hold, a long-term common policy towards the management of the issuer;
- voting rights held by a third party under an agreement providing for temporary transfer in consideration of the voting rights in question;
- voting rights attaching to shares lodged as collateral provided the person controls the voting rights;
- voting rights attaching to shares that the person has a life interest in;
- voting shares held or exercised, by an undertaking controlled by that person;
- voting rights held by a third person on that persons behalf;
- voting rights which the person may exercise as a proxy where the person has a discretion to exercise the voting rights in the absence of specific instructions.
The notification requirements apply also to persons, who holds directly or indirectly, financial instruments which result in an entitlement to acquire, on such holder’s own initiative either under a formal agreement, shares to which voting rights are attached.
There are provisions in respect of holdings by parent companies of an investment firm and management company. Subject to certain conditions, the holdings of the parent company shall not be required to be aggregated with holdings managed by the management company subject to conditions. The parent company shall not interfere by giving direct or indirect instructions or in any way in the exercise of the voting rights held by the management company or investment firm;
An issuer of shares shall, if it acquires or disposes of its own shares, either by itself or through a person acting on its behalf make public the percentage of voting rights attributable to those shares as soon as possible but no later than 4 days following acquisition or disposal, where the thresholds of 5% or 10% of the voting rights are hit.
An issuer shall, at the end of each calendar month during which an increase or decrease of such total number has occurred, disclose to the public the total number of voting rights and capital in respect of each class of share it issue and total number of voting rights attaching to shares of the issuer which are held as treasury shares.
The procedures for notification and disclosure of major holdings are set out. It must include
- information regarding the resultant situation;
- the chain of controlled undertakings through which voting rights are effectively held, if applicable;
- the date when the threshold was reached or crossed;
- the identity of the shareholder even if the shareholder is not entitled to exercise voting rights under the conditions above.
There are equivalent requirements arising from the holding of financial instruments. Additional information must be given in relation to the rights under the instrument.
A person making a notification to an issuer if it relates to shares regulated, admitted on a regulated market, is to file a copy of such notification with the authority of the home Member State of the issuer.Information must be filed with the regulator/Central Bank by electronic means.
There is provision for equivalence of third party rules and exemption from the above requirements provided that the third party rules lay down equivalent requirements above. There are criteria by which the Central Bank may deem the other country’s rules to be equivalent.