20 April 2012

EBF: Reform of the Transparency Directive

There is no greater source of legal uncertainty and burdensome costs than the fragmentation of the single market. Consequently, we do not agree that Member States should be permitted to set different notification thresholds and apply more stringent sanctions.

EBF  takes note of your proposals to expand the scope of the proposal on country-by-country reporting for extractive industries to all sectors. Whilst EBF has some initial concerns, further details on what exactly is being proposed and appropriate signposting at level 1 would be necessary so that banks could provide detailed comments on the proposal.

ECON Draft opinion:

EBF is extremely concerned about the proposed new notification timetable. In particular, in cases of cross-border transactions and when the transaction is part of a share-buying programme and one does not know when the transaction is completed. It takes time to determine positions (which will become even more challenging with the expansion of notifiable interests). Moreover, in some Member States there is a settlement cycle of two days (t+2). That means that you are the owner of the voting rights not at the moment of the transaction, but when the shares are booked into your account two days later (i.e. t+2). To notify something t+1 means that one would notify an ownership which does not exist in reality. Consequently, we strongly disagree with the proposal and would urge that you do not prescribe an unworkable notification timetable.

The justification underlying the proposed amendment states that the words “on maturity” in the Commission proposal leaves out some types of holdings that can be exercised outside the period of maturity. We would request more information regarding your understanding of the types of holdings the words “on maturity” leaves out in order to be in a position to understand the objective of this proposed amendment and its potential consequences.

JURI Draft report:

It is extremely difficult for many Member States to implement a Directive within one year. Moreover, the level 2 legislation will not be in place when Member States should have implemented the Directive. To ensure the smooth implementation of the Directive, it is appropriate that legislators provide an adequate timetable both for National Legislators, ESMA and for the market to conform. This necessitates at least 18 months for the Commission and ESMA to produce and adopt the level 2 measures, and at least six months for the market to implement the rules: as long as currently foreseen.

Full letter

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