6.4 Notifiable interests Flashcards
What does everybody have a register of and who it a maintained by?
Every company has a register of shareholders maintained by its company secretary.
What does the register of shareholders not contain?
The register contains no information about the beneficiaries of shares held on trust, or about the collective holdings of closely connected persons.
What do the UK Listing Authority’s Listing Rules state in an attempt to prevent a group of persons from covertly buying up a substantial proportion of the company’s shares, possibly in preparation for a surprise takeover bid?
Prompt disclosure of substantial shareholdings, including beneficial holdings.
What is the aim of the EU Transparency Directive?
To enhance transparency on EU capital markets by establishing rules for the disclosure of periodic financial reports and of major shareholdings for companies whose securities are admitted to trading on a regulated market in the EU.
How has the EU Transparency Directive been implemented in the UK?
Through the Disclosure and Transparency Rules (DTR).
List the disclosure thresholds outlined in The EU Transparency Directive.
- 5%
- 10%
- 15%
- 20%
- 25%
- 30%
- 50%
- 75%.
Who do investors inform when reaching, exceeding or moving below the thresholds?
The issuer who in turn informs the market.
How many business days does the Investors have to inform the issuer when reaching, exceeding or moving below the thresholds?
4 business days
Who must notify a listed company of any acquisition or disposal of an interest in that company according to the UK disclosure and transparency rules (DTR)?
Directors and other persons discharging material responsibilities (PDMR)
List the 5 rules of the UK disclosure and transparency rules (DTR).
- Notification within four business days
- Notification to the listed company
- Listed company will publish through a regulatory information service as soon as possible
- No later than the end of the next business day
- Applies to persons discharging material responsibilities (PDMR) and any connected party
What is meant by the term ‘super-equivalence’?
When implementing the EU Transparency Directive, EU member states are free to exceed the disclosure requirements in their regulations if they go beyond the requirements of the EU Transparency Directive.
Who does the UK Companies Act 2006 state is responsible for the disclosure requirements in the UK?
The law in the UK (Companies Act 2006), makes these rules the responsibility of the FCA in its guise as the Listing Authority (UKLA) and outlined in their Listing Rules.
Under what circumstances must disclosure of purchases in a UK issuer be made to the company within two business days?
If a person’s notifiable interest in the company’s voting shares:
Reaches 3%
Having reached 3%, changes (up or down) to the next whole percentage point or more. For example, an increase from 3.9% to 4.1% is notifiable, whereas an increase from 3.1% to 3.9% is not. Further disclosure is required if the shareholding falls below 3%.
Fund managers of authorised, recognised and UCITS schemes are not exempt but their notifiable threshold is 5% and then 10% instead of 3%.
Market makers have imposed upon them a restriction of no greater than or equal to 10%.
Do the FCA disclosure rules apply to non-UK issuers of shares?
No! An investor would use the rules under the Transparency Directive.
To determine whether a notifiable 3% shareholding is held, a person must include shares held by connected parties. What are the 4 types of connected parties?
- The person’s spouse
- The person’s minor children (<18)
- Companies where the person controls more than a third of the votes
- Fellow members of any concert party. A concert party will exist where there is an agreement between persons to acquire and act collectively in the use of a Public limited company’s shares (e.g. on voting).
If two parties acting in concert, each holding 2%, a joint holding of 4% is required to be reported by both.
