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I welcome this significant new advance in our efforts to make European companies more responsible and transparent. With this agreement, listed companies, including small and medium-sized issuers, will no longer be obliged to publish quarterly financial information, which will contribute to less administrative burden and should help to discourage short-termism on financial markets.
The revised Transparency Directive will prevent investors from secretly building up a controlling stake in a listed company ("hidden ownership"). Investors will now need to notify all financial instruments that have the same economic effect as holdings of shares. This agreement ensures that the disclosure requirements for the extractive and forestry industries as recently agreed in the Accounting Directiveapply to all companies of those sectors that are listed in the EU.
Background
On 25 October 2011 the Commission adopted a legislative proposal (see IP/11/1238 and MEMO/11/734) on the existing Directive on transparency requirements for listed companies. This Directive (2004/109/EC) requires issuers of securities traded on regulated markets within the EU to ensure appropriate transparency through a regular flow of information to the markets.
The Commission proposed to revise this Directive since some of the transparency requirements risked creating considerable administrative burdens.The requirement to publish quarterly financial information contributes, in particular for small and medium-sized issuers, to high compliance costs linked to listing on the regulated markets. This requirement is also perceived as a regulatory incentive encouraging the culture of short-termism on financial markets. The existing Directive foresees a number of notification thresholds for acquirers when they reach a certain stake in a listed company. However, the current rules contain a notification gap: holdings of certain types of financial instruments that can be used to acquire economic interests in listed companies without acquiring shares are not currently covered by the Directive’s rules for disclosure. This notification gap will be closed in the revised Transparency Directive.