Disclosure and transparency requirements under EC company law in the light of directive 2004/109/EC

Abstract

This thesis will examine the provisions introduced by Directive 2004/109/EC in relation to disclosure and transparency requirements imposed upon issuers who are admitted to a regulated market. The Directive contains rules relating to periodic and ongoing information; the medium of dissemination and storage of regulated information; and exemptions and liability for breach of such rules. Malta has implemented the Directive by amending the Listing Rules, whereas in the UK such rules were introduced both by amending the Listing Rules and the Financial Services and Markets Act 2000. Despite the deadline for implementation having elapsed on the 20th January 2007, Italy at the time of writing has not transposed the Directive. Chapter 1 begins by introducing the concepts of disclosure and transparency requirements. A brief summary of financial scandals follows in order to understand why such requirements are important. The process that led to the adoption of the Transparency Directive, including the consultations and the proposals set by the European Commission, will be examined. Chapter 2 concerns the requirements relating to periodic information, namely annual, half-yearly and interim management statements. Interim management statements have been introduced as a compromise to the Commission's proposal of quarterly statements. Chapter 9 of the local Listing Rules, which implements the Transparency Directive is analysed. Chapter 3 delves into the issue of acquisition or disposal of major shareholdings. The Directive defines such dealings by imposing thresholds and stipulates deadlines within which the shareholder and issuer must make such notifications. Chapter 4 enters into the issue of dissemination and storage of regulated information as found in the Transparency Directive. The idea is to convey information to the end users in a timely manner. Moreover an Official Appointed Mechanism (OAM) is required to be appointed in every Member State for the storage of such information. In Malta, the MFSA has appointed the Malta Stock Exchange as such. Reference is also made to the position in the UK. Chapter 5 concerns the issue of liability. The Directive requires that Member States impose liability for the obligations found in the Directive either on the issuer itself or the administrative management body. Chapter 6 contains the final conclusions that can be drawn from the Transparency Directive. Criticisms are raised as to the miss outs of the Directives. A cost-benefit analysis of the Transparency Directive will also be undertaken.