EUROPE: Commission proposes amending EU Transparency Directive for EU major shareholdings

Tuesday October 25 2011

On 25th October 2011 the European Commission (EC) proposed a revision of the European Union’s Transparency Directive for EU major shareholdings. The European Commission is proposing to modify notification requirements for acquirers when they reach a certain stake in a listed company, reduce burdensome reporting obligations for all listed companies, and simplify accounting rules for small- and medium-sized enterprises.

The existing Transparency Directive foresees a number of notification thresholds for acquirers when they reach a certain stake in a listed company. However, under the current rules holdings of certain types of financial instruments that can be used to acquire economic interest in listed companies without acquiring shares are not currently covered by the Directive’s rules for disclosure.

The revised Transparency Directive would therefore require disclosure of EU major shareholdings of all financial instruments that could be used to acquire economic interest in listed companies and had the same effect as holdings of equity. It would also require the aggregation of holdings of financial instruments with holdings of shares for the purpose of calculation of the thresholds that trigger the notification requirement.

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