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Reinforcing the transparency of information about issuers of securities

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Reinforcing the transparency of information about issuers of securities

The aim of the transparency directive is to impose a level of transparency and information commensurate with the aims of sound investor protection and market efficiency.

ACT

Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC.

SUMMARY

This directive aims to improve information supplied to investors about issuers of securities admitted to trading on a regulated market, located or operating in a Member State. The directive obliges Member States to publish periodic financial information on their income throughout the financial year, in addition to continuous information concerning the possession of significant percentages of voting rights.

The transparency directive was duly amended in 2013 by Directive 2013/50/EU, which aims at, in particular:

  • reducing the administrative burden which weighed on small and medium issuers, in order to improve their access to capital;
  • improving the efficiency of the transparency system, particularly with regard to the publication of information on corporate ownership.

Regulation for the new directive shall apply as soon as it has been transposed by Member States, no later than 26 November 2015.

Periodic financial information

Periodic information relates to the financial situation of the issuer of securities and that of the enterprises it controls. Issues of securities must divulge annual financial, reports, as well as interim financial reports (interim management statements) if they do not already publish quarterly financial reports.

Nevertheless, Directive 2013/50/EU has removed the obligation to publish an interim statement or quarterly financial report. On the other hand, the financial report must remain available to the public for at least 10 months and no longer 5.

Notice concerning the possession of significant voting rights

When a shareholder acquires or yields the shares of an issuer whose shares are admitted for negation on a regulated market and which carry voting rights, s/he must notify the issuer of the percentage of voting rights that s/he possesses following the operation. This rule applies if the percentage owned reaches certain thresholds (5, 10, 15, 20, 25, 30, 50 and 75 %) or goes above or below those thresholds. This is also true in other cases where a natural or legal person has the right to acquire, yield or exercise voting rights.

Directive 2013/50/EU has extended notification of threshold crossing to financial instruments which give entitlement or the ability to acquire shares with a comparable economic effect. To assess threshold crossing, the holder must approve of shares with other financial instruments.

Notification, which must be given as quickly as possible, concerns the new distribution of voting rights, the identifier of the shareholder, the date of change and the threshold of votes reached.

Report on payments made to governments

This is a new measure introduced by Directive 2013/50/EU. This directive obliges listed companies which are active in extractive industries (oil, gas and minerals) and forest farming to declare payments made to governments in the countries where they conduct their activities, in a separate report compiled annually.

REFERENCES

Act

Entry into force

Deadline for transposition in the Member States

Official Journal of the European Union

Directive 2004/109/EC

20.1.2005

20.1.2007

OJ L 390 of 31.12.2004

Amending act(s)

Entry into force

Deadline for transposition in the Member States

Official Journal of the European Union

Directive 2008/22/EC

20.3.2008

-

OJ L 76 of 19.3.2008

Directive 2010/73/EU

31.12.2010

1.7.2012

OJ L 327 of 11.12.2010

Directive 2010/78/EU

4.1.2011

31.12.2011

OJ L 331 of 15.12.2010

Directive 2013/50/EU

26.11.2013

26.11.2015

OJ L 294 of 06.11.2013

Amendment and successive corrections to Directive 2004/109/EC have been incorporated into the basic text. This consolidated version has only a documentary value.

RELATED ACTS

Commission Regulation (EC) no 1569/2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council [OJ L340 of 22.12.2007].

Commission Recommendation 2007/657/EC of 11 October 2007 on the electronic network of officially appointed mechanisms for the central storage of regulated information referred to in Directive 2004/109/EC of the European Parliament and of the Council [OJ L 267 of 12.10.2007].

Commission Directive 2007/14/EC of 8 March 2007 laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market [OJ L 69 of 9.3.2007].

Last updated: 29.05.2014

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