8 - the disclosure and transparency rules

what does DTR stand for

the disclosure + transparency rules

what are the 3 purposes of DTR

promote quick + fair disclosure of relevant info to the market

set out specific circumstances for delayed disclosure of inside info

set out requirements to ensure inside info is kept confidential

what happens if there is a breach of confidentiality

public disclosure must be made (tell everyone)

how is public disclosure made

through a Regulatory Information Service

what is the transparency directive

means shareholder must notify issuer, and issuer must notify market, when holdings reach/exceed/move below:

5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%

(within 4 days)

why is this the case

so the investing public are aware of any significant stakes in the company

what are the SEC rules

the notification threshold is 5%

the acquirer must notify the issuer and the SEC within 10 days

what is different about UK DTR

its more intense than EU Directive

when do you disclose under UK DTR

when a holding reaches 3%

then when it goes up or down to the next whole % point

when a holding goes below 3%

what does this include (UK disclosure at 3%)

shares held by connected parties

who is a connected party

investor’s spouse + children (under 18)

companies controlled by investor

concert parties

what is considered a company controlled by the investor

at least 1/3 of voting rights

what is a concert party

an investor rallies a lot of people so they can all go invest collectively

which types of shares are disregarded her (6 types)

acquired solely for clearing and settlement (within a three day period)

held by a custodian or bare trustee

held by a market maker (if less than 10%)

held by an investment firm (if less than 5%)

held as collateral

acquired for stabilisation as long as voting rights are not exercised

when must disclosure be made under UK rules

notify the company within 2 business days

for a LISTED COMPANY: to a primary information provider by the end of the next business day

what is a Companies Act Section 793 letter

when a company requests disclosure via a written notice of a shareholder’s total interest in a company

what can this request include

confirmation of past shareholdings held at any time in the past three years

who responds

if its sent to nominee company, the company secretary responds

what happens if a S793 letter is ignored

the shares are frozen