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Securities transparency requirements updated

18 October 2013 by Alexandra Jones

Following the approval of a new directive by the Council of the European Union, updated transparency requirements for issuers of securities have been introduced.

The new directive builds upon the initial 2004 requirements for issuers of securities on regulated markets and is aimed at ensuring a high level of investor confidence throughout the EU.


It requires issuers of securities traded on regulated markets to publish periodic financial information about their performance over the financial year and on-going information on major holdings of voting rights.


The improvements are aimed at simplifying certain obligations so as to make regulated markets more attractive for raising capital for small and medium-sized issuers.


The new directive is intended to make the obligations applicable to listed small and medium-sized issuers more proportionate, while guaranteeing the same level of investor protection, and to facilitate cross-border access to information.


In addition, the update is aimed at improving legal clarity and effectiveness, notably with respect to the disclosure of corporate ownership.


It also clarifies, for instance, provisions in relation to third country issuers, and eliminates administrative burdens that are now considered unnecessary.


It reviews the definition of which types of financial instruments are covered, as well as the calculation of thresholds for the notification of major holdings.


To ensure this, the text sets out to harmonise member states legal frameworks for administrative sanctions, setting minimum common standards on certain key aspects of sanction regimes. (Criminal sanctions are not covered.)


The draft directive also includes a requirement for listed companies operating in the oil, gas and mineral extractive as well as the forestry industry, to disclose payments to governments in countries where they operate. This follows a commitment made by members of the G8 at Deauville in May 2011.

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