Shareholder Disclosure: Long Holdings in Europe
Investment managers are subject to hundreds of threshold reporting rules throughout Europe, for long holdings, short selling, and dealing disclosures. The reason: applicable rules are the local laws of wherever the issuer is based or listed (and Europe is still far from fully harmonizing them). This map illustrates what the long position holder may face on any given day:
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In addition to the standard regulator-imposed notification thresholds for long holdings, many Belgium issuers impose their own threshold disclosure obligations, at levels as low as 1%.
Investments in certain issuers with a minimum level of registered capital trigger a stricter disclosure obligation, at a 1% or 3% initial threshold rather than the standard 5%.
As in Belgium, many issuers in France set forth their own separate shareholder disclosure thresholds. The vast majority of blue chip issuers comprising the CAC 40 impose them, as do hundreds of other issuers large and small. Notification thresholds can start as low as 0.5%.
Germany’s financial authority (BaFin) has regularly required shareholders to submit additional supporting documentation with their disclosures, including a corporate structure chart of relevant managers and funds.
In addition to its fixed thresholds that start at 5%, Greece requires additional notifications when holding at least 10% and increasing or decreasing holdings by at least 3%.
Iceland’s regulator, the Financial Services Authority, has a tight notification deadline for shareholders reaching disclosure thresholds: one trading day.
Investors with long holdings in Ireland should be aware of several different disclosure regimes that may affect them. The “Transparency Regulations” impose the EU-required thresholds (starting at 5%), as well as stricter thresholds for investing in Ireland-registered issuers (3% and every higher percentage point). An additional set of thresholds for investing in Ireland PLCs are set forth in Ireland’s “Companies Act” (also 3% and every higher percentage point). Finally, the “Substantial Acquisitions” regime requires separate filings with different forms (at 15% and greater levels), among other restrictions.
Not to be outdone by Iceland, Norway’s regulator has imposed a difficult deadline, obliging shareholders reaching a threshold to make their filing on that very same trading day. The regulator describes the deadline as “immediately”, which many filers interpret as requiring notification within one hour.
Like Greece, Poland requires additional notifications for changes in holdings, if already holding at least 10%. But in Poland these further thresholds depend on the trading venue involved: notify upon 2% changes for holdings in Warsaw Stock Exchange-listed issuers, or upon 5% changes for issuers on other markets. (In addition, once holding 33%, notifications are required for every 1% change.)
Portugal sets forth no fewer than three different sets of long filing thresholds for shareholders (starting at 2%), depending on where the relevant issuer is registered and listed.
Shareholders considered to be based in a “tax or regulatory haven” must disclose their positions at every percentage point of holdings reached in a Spanish issuer, starting at 1%. (Spain’s changing list of tax havens has included jurisdictions such as Bermuda, the Cayman Islands, the Cook Islands, the British Virgin Islands, the US Virgin Islands, Saint Lucia, Gibraltar, Liechtenstein, Monaco, Isle of Man, and the Channel Islands.)
Sweden’s financial regulator (Finansinspektionen), in detailed public announcements that identify offending shareholders, continues to levy frequent fines for late or missed substantial shareholder filings. Sanctions are commonly issued several times per month, each typically amounting to hundreds of thousands of Swedish Krona (tens of thousands in US Dollars), but can be much higher.
Among the several unique aspects of Switzerland’s shareholder disclosure regime, separate calculations are required, and separate notification obligations can be triggered, for the holdings categories “purchase positions” and “sale positions”. They include specific asset types, yet may also overlap one another in certain respects, as a shareholder calculates its positions and determines when to make a filing.