Prepared for the European Commission Internal Market and Services DG Final Report Transparency Directive Assessment Report Transparency Directive Assessment Report 2 Acknowledgement This study, undertaken by Mazars in collaboration with Marccus Partners, the law fi rm for the Mazars Group, is the result of a team effort which includes all the offi ces across 15 EU Member States and 6 major third countries. The project coordinators would like to express their deepest gratitude to all contributors. Above all, we are grateful to the European Commission for having commissioned this study and to the Commission staff for their comments and for the working relationship built up over the past months. We are grateful to the almost 400 stakeholders across the 21 jurisdictions included in the scope of the study that took the time to complete our on-line questionnaire. We are also deeply indebted to the 90 experts and market players that we had the opportunity to interview. Without their testimony on the day to day functioning of the transparency requirements established by the Transparency Directive we would have omitted some the key points. The results included in this study have been achieved largely thanks to the collaboration of 21 law fi rms; we are therefore grateful to CHSH, Cerha Hempel Spiegelfeld Hlawati (Austria), PRK Partners (Czech Republic), Marccus Partners (France), Marccus Partners (Germany), DLA Piper (Hungary), Eugene F. Collins Solicitors (Ireland), Marccus Partners (Italy), Elvinger, Hoss & Prussen (Luxembourg), Pellicaan Advocaten (Marccus Partners Alliance) (Netherlands), Siemiatkowski I Davies (Poland), Marccus Partners (Romania), PKR Partners (Slovakia), Marccus Partners (Spain), Mannheimer Swartling (Sweden), Olswang (United Kingdom), and outside the EU to HPP Attorneys at Law (Shanghai, China), Gallant Y.T & V Co. (Hong Kong), Dua Associates (India), Nagashima Ohno & Tsunematsu (Japan), Altenberger & Partner Rechtsauwälte (Zurich, Switzerland) and Duane Morris LLP (New York, USA). Our thanks also goes to the operational group, and in particular, Pierre-Paul Jacquet, Gabriel Derycke, Alex Nowak, as well as to Dany Sok, Sabine Lutz, Elise Geairon and Amélie Travers that very effi ciently coordinated the work on a cross-border basis, and were instrumental in producing this fi nal report. Likewise, we wish to record our appreciation for the role played by Serge Castillon in the management of the contract. Finally, we would like to thank each Mazars Managing Partner in the 21 countries and their teams for their time, diligence and expertise. Fabrice DEMARIGNY Christophe CLERC Partner, Group Head of Capital Markets Activities Attorney at Law, Partner MAZARS MARCCUS PARTNERS Table of contents Executive summary and analytical conclusion .................................................................................IX Possible improvements ................................................................................................................ XXIII Study on the application of selected obligations of the Transparenty Directive ......................XXVII 1 - Clarity and suitability of the obligations imposed by the Directive 1.1 Key perceptions and implemention issues .................................................................................................... 34 1.2 Key provisions of the Directive ..................................................................................................................... 36 1.3 Examination of the national legal framework transposing the Directive ........................................................ 36 1.4 Clarity of the Directive .................................................................................................................................. 38 1.5 Impact of the Directive ................................................................................................................................. 42 1.6 Need for additional guidance? ...................................................................................................................... 48 1.7 Suitability of the provisions of the Directive .................................................................................................. 52 1.8 Level of harmonisation ................................................................................................................................. 54 1.9 SME’s and non regulated markets ................................................................................................................. 57 2 - Disclosure of periodic information 2.1 Key perceptions and implementation issues .................................................................................................. 62 2.2 Key provisions of the Directive ..................................................................................................................... 64 2.3 Compliance review ....................................................................................................................................... 64 2.4 Suitability of periodic information disclosed ................................................................................................. 72 2.5 Publication timing ........................................................................................................................................ 77 2.6 Quarterly fi nancial information .................................................................................................................... 84 2.7 Use of national GAAPs .................................................................................................................................. 90 3 - Information about major holdings 3.1 Key perceptions and implemention issues .................................................................................................... 94 3.2 Key provisions of the Directive ..................................................................................................................... 99 3.3 General suitability of the rules .................................................................................................................... 100 3.4 Thresholds levels ........................................................................................................................................ 112 3.5 Financial instruments included in the notifi cations: scope and exemptions ................................................ 118 The full report and the annexes to the Transparency Report are available on the European Commission Internal Market and Services DG website: http://ec.europa.eu/internal_market/securities/transparency/index_en.htm and on www.mazars.com. 3.6 Financial innovation ................................................................................................................................... 120 3.6.1 Stock lending ................................................................................................................................................ 120 3.6.2 Empty voting ................................................................................................................................................ 132 3.6.3 Cash settle derivatives and contracts for diff erence ........................................................................................140 3.7 Signifi cant holding and intention pursued .................................................................................................. 140 3.8 Practical notifi cation ................................................................................................................................... 144 3.8.1 Timing for notifi cation .................................................................................................................................. 144 3.8.2 Disclosure method......................................................................................................................................... 145 3.8.3 Standard Notifi cation Form .......................................................................................................................... 146 4 - Dissemination and storage of regulated information 4.1 Key perceptions and implemention issues .................................................................................................. 152 4.2 Key provisions of the Directive ................................................................................................................... 153 4.3 Dissemination of regulated information ...................................................................................................... 154 4.3.1 Means of dissemination................................................................................................................................. 154 4.3.2 Access to information disclosed by issuers ..................................................................................................... 158 4.4 Storage of regulated information ................................................................................................................. 161 4.4.1 Relevance of the information stored ............................................................................................................... 161 4.4.2 Storage practices ........................................................................................................................................... 162 4.4.3 Access to relevant information stored ...........................................................................................................