Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending 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 and Commission Directive 2007/14/EC
Date: 2011-10-25
Institutions: European Commission
Subjects: consumer information, dissemination of information, intervention policy, investment, official market, securities, simplification of formalities, small and medium-sized enterprises, stock-exchange listing

EUROPEAN COMMISSION 

Brussels, 25.10.2011 
COM(2011) 683 final 

2011/0307 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending 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 and Commission Directive 2007/14/EC  

(Text with EEA relevance) 
{SEC(2011) 1279 final} 
{SEC(2011) 1280 final} 

 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1.  General context 

Article  33  of  the  Transparency  Directive  (Directive  2004/109/EC)  requested  the  European 
Commission  to  report  on  the  operation  of  this  Directive1.  The  report  published  by  the 
Commission in accordance with this Article shows that the transparency requirements of the 
Directive are considered to be useful for the proper and efficient functioning of the market by 
a majority of stakeholders. 

However,  despite  these  achievements,  the  review  of  the  operation  of  the  Transparency 
Directive showed that there are areas where the regime it created could be improved. It is thus 
desirable to provide for the simplification of certain issuers' obligations with a view to make 
regulated  markets  more  attractive  for  small  and  medium-sized  issuers  raising  capital  in 
Europe. Additionally,  the legal clarity and effectiveness  of  the  existing  transparency  regime 
needs to be increased, notably with respect to the disclosure of corporate ownership.  

This proposal for an amendment of the Transparency Directive is consistent with the objective 
of maintaining and, where necessary, enhancing the level of investor protection envisaged in 
the  Directive  and  ensuring  that  the  information  disclosed  is  sufficient  and  useful  for 
investment purposes at acceptable cost. 

1.2. 

Existing Community provisions in this area  

The objective of the Transparency Directive is to ensure a high level of investor confidence 
through equivalent transparency for securities issuers and investors throughout the European 
Union.  In  order  to  achieve  this  objective,  the  Transparency  Directive  requires  issuers  of 
securities  traded  on  regulated  markets  to  publish  periodic  financial  information  about  the 
issuer's  performance  over  the  financial  year  and  on-going  information  on  major  holdings  of 
voting  rights.  It  also  introduces  minimum  standards  for  access  to  and  storage  of  regulated 
information.  The  Transparency  Directive  was  complemented  by  Commission  Directive 
2007/14/EC2 which contains implementing measures and by Commission recommendation on 
storage  of  regulated  information3.  The  Transparency  Directive  has  been  subsequently 
amended  by  Directives  2008/22/EC4  and  2010/78/EU5  as  regards  the  implementing  powers 

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2 

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4 

COM(2010)243 final of 27 May 2010. This report is accompanied by a more detailed Commission staff 
working document (SEC(2010)61). 
Commission  Directive  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, 
9.3.2007, p. 27 
Commission  Recommendation  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 L267, 12.10.2007, p.16 
Directive  2008/228EC  of  the  European  Parliament  and  the  Council  of  11  March  2008  on  the 
harmonisation of transparency requirements in relation to information about issuers whose securities are 
admitted  to  trading  on  a  regulated  market,  as  regards  the  implementing  powers  conferred  on  the 
Commission , OJ 6, p.50. 

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conferred  on  the  Commission  and  the  draft  technical  standards  developed  by  the  European 
Securities and Markets Authority, and by Directive 2010/73/EU6 to align certain provisions of 
the Transparency Directive with the modified Prospectus Directive7.  

The  Transparency  Directive  obligations  are  closely  connected  with  requirements  set  out  in 
other  EU  texts,  either  in  the  corporate  governance/company  law  field  or  in  the  financial 
markets/securities  field.  In  particular, 
includes  disclosure 
requirements  that  are  very  close  to  the  core  area  of  the  Transparency  Directive  obligations. 
The Prospectus Directive requires companies offering shares to the public in the EU to issue a 
prospectus that complies with the detailed rules under the directive. It also allows companies 
to issue a prospectus in one EU country that would cover subsequent offers of securities to the 
public or admission to trading throughout Europe, with minimal translation obligations. 

the  Prospectus  Directive 

In  addition,  the  Transparency  Directive  is  the  instrument  for  implementing  disclosure 
obligations  under  other  directives,  such  as  the  Market  Abuse  Directive8,  which  prohibits 
abusive  behaviour  on  regulated  markets  (e.g.  insider  dealing  and  market  manipulation)  and 
requires issuers to disclose inside information. 

1.3. 

Consistency with other policies 

Improvement  of  the  regulatory  environment  for  small  and  medium-sized  issuers  and  their 
access to capital are high political priorities for the Commission. In this respect, in the Single 
Market  Act  Communication  of  April  20119,  the  Commission  stated  that  the  Transparency 
Directive should be revised "in order to make the obligations applicable to listed SMEs more 
proportionate, whilst guaranteeing the same level of investor protection". This proposal aims 
at amending the Transparency Directive in order to meet this objective.  

In addition, the review of the Transparency Directive aims at ensuring transparency of major 
economic  acquisitions  in  companies,  investor  confidence  and  increased  focus  on  long-term 
results,  and  thus  contributes  to  the  general  objective  of  the  Commission  to  strengthen  the 
financial  stability.  Moreover  improving  access  to  regulated  information  at  the  Union  level 
aims  at  increasing  functional  integration  of  European  securities  markets  and  at  insuring  a 
better cross border visibility of small and medium-sized listed companies. 

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9 

Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 amending 
Directives  98/26/EC,  2002/87/EC,  2003/6/EC,  2003/41/EC,  2003/71/EC,  2004/39/EC,  2004/109/EC, 
2005/60/EC,  2006/48/EC,  2006/49/EC  and  2009/65/EC  in  respect  of  the  powers  of  the  European 
Supervisory Authority (European Banking Authority), the European Supervisory Authority (European 
Insurance  and  Occupational  Pensions  Authority)  and  the  European  Supervisory  Authority  (European 
Securities and Markets Authority), OJ L 331, 15.12.2010, p. 120.  
Directive  2010/73/EU  of  the  European  Parliament  and  the  Council  of  24  November  2010  amending 
Directives 2003/71/EC  on  the  prospectus  to  be published  when  securities  are  offered to  the  public  or 
admitted to trading and 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 327, p.1. 
Directive  2003/71/EC  of  the  European  Parliament  and  of  the  Council  of  4  November  2003  on  the 
prospectus  to  be  published  when  securities  are  offered  to  the  public  or  admitted  to  trading  and 
amending Directive 2001/34/EC, OJ L 345, 31.12.2003, p. 64. 
Directive  2003/6/EC  of  the  European  Parliament  and  of  the  Council  of  28  January  2003,  on  insider 
dealing and market manipulation. OJ L, 12 April 2003, p 16. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  Economic  and 
Social  Committee  and  the  Committee  of  the  Regions,  "Single  Market  Act  -Twelve  levers  to  boost 
growth and strengthen confidence - Working together to create new growth": COM(2011) 206 final.  

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As regards the general issue of implementation, the Transparency Directive is also revised in 
order to follow the conclusions of the Commission Communication on reinforcing sanctioning 
regimes  in  the  financial  services  sector10.  In  this  Communication,  the  Commission  has 
envisaged EU legislative action to set minimum common standards on certain key issues of 
sanctioning regimes, to be adapted to the specifics of the different sectors. In order to ensure 
that  sanctions  of  breaches  of  the  transparency  requirements  are  sufficiently  effective, 
proportionate and dissuasive, the proposal aims to reinforce and approximate Member States' 
legal  framework  concerning  administrative  sanctions  and  measures  by  providing  for 
sufficiently  dissuasive  administrative  sanctions  which  apply  to  breaches  of  the  key 
requirements  of  the  Transparency  Directive,  and  an  appropriate  personal  scope  of 
administrative sanctions and publication of sanctions. Criminal sanctions are not covered by 
this proposal. 

2. 

RESULTS  OF  THE  CONSULTATIONS  WITH  THE  INTERESTED  PARTIES  AND  THE 
IMPACT ASSESSMENT 

2.1. 

Consultations with the interested parties 

The proposal has been prepared in accordance with the Commission's approach to principles 
of  better  regulation.  The  initiative  and  the  impact  assessment  are  the  result  of  an  extensive 
dialogue and consultation with all major stakeholders, including securities regulators, market 
participants  (issuers,  intermediaries  and  investors),  and  consumers.  It  is  built  upon  the 
observations  and  analysis  contained  in  the  above  mentioned  Commission  report  on  the 
operation  of  the  Transparency  Directive  and  the  more  detailed  Commission  staff  working 
document which accompanied it. It draws on the findings of an external study11 conducted in 
2009 for the Commission on the application of selected obligations of this Directive, which 
includes  evidence  gathered  from  market  participants  through  a  survey.  The  Commission 
report also draws on reports published by the Committee of European Securities Regulators 
(CESR) (now ESMA)12 and by the European Securities Markets Expert Group (ESME)13 in 
this area. CESR (ESMA) and ESME reports have been particularly valuable to identify areas 
of the Transparency Directive with unclear provisions and/or which could be improved. 

Comments received from stakeholders participating in the public consultation were also taken 
into  account.  As  part  of  the  consultation  process,  the  Commission  services  organised  on  11 

10 

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13 

Communication  of  9  December  2010  "Reinforcing  sanctioning  regimes  in  the  financial  sector" 
COM(2010)716 final. 
Mazars (2009), Transparency Directive Assessment Report, external study conducted for the European 
Commission. 
CESR  was  an  independent  advisory  group  to  the  European  Commission  composed  by  the  national 
supervisors of the EU securities markets. See the European Commission's Decision of 23 January 2009 
establishing the Committee of European Securities Regulators 2009/77/CE. OJ L25, 23.10.2009, p. 18). 
The role of CESR was to improve co-ordination among securities regulators, act as an advisory group to 
assist  the  EU  Commission  and  to  ensure  more  consistent  and  timely  day-to-day  implementation  of 
community legislation in the Member States. It has been replaced by European Securities and Markets 
Authority: ESMA as from 1 January 2011: see Regulation No 1095/2010 of the European Parliament 
and of the Council of 24 November 2010: OJ L 331/84 of 15 December 2010. 
ESME  was  an  advisory  body  to  the  Commission,  composed  of  securities  markets  practitioners  and 
experts.  It  was  established  by  the  Commission  in  April  2006  and  operated  on  the  basis  of  the 
Commission Decision 2006/288/EC of 30 March 2006 setting up a European Securities Markets Expert 
Group to provide legal and economic advice on the application of the EU securities Directives (OJ L 
106, 19.4.2006, p. 14–17). 

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June  2010  a  public  conference  with  the  participation  of  several  stakeholders.  Discussion 
focused on the attractiveness of regulated markets to small and medium sized issuers and the 
possible  enhancement  of  the  transparency  obligations  regarding  corporate  ownership 
disclosures.  

2.2. 

Impact assessment 

In line with its "Better Regulation" policy, the Commission conducted an impact assessment 
of policy alternatives. Below are presented the best policy options which were retained for the 
following topics: 

-  allow  for  more  flexibility  regarding  the  frequency  and  timing  of  publication  of 
periodical financial information, in particular for small and medium-sized issuers: 

Abolish  the  obligation  to  present  quarterly  financial  reports  for  all  listed  companies  – 
Introducing  differentiated  disclosure  regimes  for  companies  listed  on  a  regulated  market 
according to their size was considered undesirable as such a regime would introduce double 
standards for the same market segment and would therefore be confusing for investors. The 
preferred  policy  option  reduces  compliance  costs  for  all  companies  listed  on  regulated 
markets  but  should  in  particular  benefit  the  smaller  ones,  reducing  considerably  the 
administrative burden linked to the publication and preparation of quarterly information. This 
option  enables  the  small  and  medium-sized  issuers  to  redirect  their  resources  to  publish  the 
kind  of  information  that  suits  best  their  investors.  This  option  should  reduce  short  term 
pressure on issuers and incentivise investors to adopt a longer term vision. It should not have 
negative impact on investor protection. Investor protection is already sufficiently guaranteed 
through  the  mandatory  disclosure  of  half  yearly  and  yearly  financial  results,  as  well  as 
through the disclosures required by the Market Abuse and Prospectus Directives. Therefore, 
investors  should  be  duly  informed  about  important  events  and  facts  that  could  potentially 
influence  the  price  of  the  underlying  securities  independently  of  the  disclosure  of  quarterly 
information currently required by the Transparency Directive.  

- simplify the narrative parts of financial reports for small and medium-sized issuers: 

Require  ESMA  to  prepare  non  binding  guidance  (templates)  on  narrative  content  of  the 
financial reports for all listed companies – This option allows for cost savings and improves 
comparability of information for investors. It also increases the cross-border visibility of the 
small and medium-sized issuers.  

- eliminate the gaps in requirements for notification concerning major holdings of voting 
rights: 

Extend the disclosure regime to all instruments of similar economic effect to holding of shares 
and entitlements to acquire shares – This option captures cash settled derivatives14 as well as 
any future similar financial instruments and closes a gap in the existing disclosure regime. It 
has  a  strong  positive  impact  on  investor  protection  and  market  confidence  as  it  discourages 
secret stock building in listed companies.  

- eliminate divergences in notification requirements for major holdings: 

14 

Cash-settled equity derivatives refer to equity linked transactions settled by the payment of cash only 
without any physical delivery of the underlying equity. 

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Harmonise the regime for the disclosure of major holdings of voting rights by requiring the 
aggregation of holdings of shares with those of financial instruments giving access to shares 
(including  the  cash  settled  derivatives)  –  This  option  creates  a  uniform  approach,  reduces 
legal uncertainty, enhances transparency, simplifies cross-border investments and reduces its 
costs.  

In addition, technical adjustments and clarifications were considered in order to create a better 
implementation framework for the Directive. 

The full impact assessment report is available at: […] 

2.3. 

Legal basis 

The EU has the right to act in this area according to Articles 50 and 114 of the TFEU.  

On 23 September 2009, the Commission adopted proposals for Regulations establishing EBA, 
EIOPA, and ESMA. In this respect the Commission wishes to recall the Statements in relation 
to  Articles  290  and  291  TFEU  it  made  at  the  adoption  of  the  Regulations  establishing  the 
European  Supervisory  Authorities  according  to  which:  "As  regards  the  process  for  the 
adoption  of  regulatory  standards,  the  Commission  emphasises  the  unique  character  of  the 
financial services sector, following from the Lamfalussy structure and explicitly recognised in 
Declaration  39  to  the  TFEU.  However,  the  Commission  has  serious  doubts  whether  the 
restrictions  on  its  role  when  adopting  delegated  acts  and  implementing  measures  are  in  line 
with Articles 290 and 291 TFEU." 

2.4. 

Subsidiarity and proportionality 

The  problems  identified  concerning  small  and  medium-sized  issuers  derive  from  European 
Union's and national legislation and can only be addressed through changes in the legislation 
at the level of the European Union. In addition, only a binding legal instrument adopted at the 
EU level would ensure that all Member States apply the same regulatory framework based on 
the  same  principles,  thereby  ending  the  current  fragmentation  of  the  regulatory  response 
concerning the regime for notification of major holdings.  

Sanctions  which  are  divergent  and  too  weak  risk  being  insufficient  to  effectively  prevent 
breaches  of  the  Transparency  Directive  and  to  ensure  effective  supervision  and  the 
development  of  a  level  playing  field.  Action  at  EU  level  can  avoid  divergences  and 
weaknesses  in  the  legal  framework  of  sanctioning  and  investigative  powers  available  to 
national  authorities  and 
the  elimination  of  regulatory  arbitrage 
to 
opportunities. 

thus  contribute 

2.5. 

Choice of instruments 

A modification of the current Transparency Directive seems to be the most viable solution. A 
directive may allow for maximum harmonisation in some areas but still leaves Member States 
flexibility to allow for their specific situation to be taken into account in other areas.  

2.6.  More detailed explanation of the specific provisions of the proposal 

- Choice of the home Member State for third country issuers 

The  Transparency  Directive  is  currently  unclear  with  regard  to  which  country  is  the  home 
Member State for issuers who have to choose their home Member State according to article 2, 

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paragraph  1,  sub  (i)  (ii),  but  who  have  not  done  so.  It  is  important  that  the  Transparency 
Directive  does  not  provide  for  any  possibility  to  implement  the  rules  in  such  a  way  that  a 
listed  company  can  operate  without  being  under  the  supervision  of  any  Member  State. 
Therefore, following the comments received from the respondents to the public consultation, 
a  default  home  Member  State  is  established  for  third  country  issuers  who  have  not  chosen 
their home Member State in accordance with Article 2(1) (i) during a period of three months. 

-  The  requirement  to  publish  interim  management  statements  and/  or  quarterly  reports  is 
abolished 

In  order  to  reduce  the  administrative  burden  linked  to  listing  on  regulated  markets  and 
encourage long-term investment, the requirement to publish interim management statements 
is  abolished  for  all  listed  companies.  The  publication  of  such  information  is  not  considered 
necessary  for  investor  protection  and  should  therefore  be  left  to  the  market  in  order  to 
eliminate unnecessary administrative burden. Issuers can continue to publish such information 
if there is a strong demand from investors. For the sake of efficiency and in order to provide 
for a harmonised regime for disclosure, Member States should not continue to impose such an 
obligation  in  their  national  legislation.  Currently,  many  Member  States  impose  stricter 
disclosure requirements than the minimum foreseen in the Directive. In order to ensure that all 
listed companies in the EU benefit from equal treatment and that the administrative burden is 
effectively  reduced,  Member  States  should  be  prevented  from  gold  plating  and  should  not 
require more than what is necessary for investor protection.  

- Broad definition of financial instruments subject to notification requirement 

In order to take account of financial innovation and ensure that issuers and investors have full 
knowledge  of  the  structure  of  corporate  ownership,  the  definition  of  financial  instrument 
should be broadened to cover all instruments of similar economic effect to holdings of shares 
and  entitlements  to  acquire  shares,  whether  giving  right  to  a  physical  settlement  or  not. 
Currently,  the  Transparency  Directive  does  not  require  notification  of  certain  types  of 
financial instruments that do not give the right to acquire voting rights, but which can be used 
to build secret stakes in listed companies without being disclosed to the market. 

-  Greater  harmonisation  for  notification  of  major  holdings  -  Aggregation  of  holdings  of 
shares with holdings of financial instruments 

The  Transparency  Directive  does  not  require  aggregation  of  holdings  of  voting  rights  with 
holdings of financial instruments to calculate the thresholds for notification of major holdings. 
Member  States have  adopted  different  approaches in this field. This results in  a fragmented 
market  and  additional  costs  for  cross-border  investors.  A  uniform  approach  concerning  the 
calculation  of  thresholds  for  notification  of  major  holdings  is  essential  in  order  to  improve 
legal  certainty,  enhance  transparency,  simplify  cross-border  investments  and  reduce  the 
underlying  costs.  Therefore,  holdings  of  shares  need  to  be  aggregated  with  the  holdings  of 
financial instruments for the calculation of notification thresholds. Netting of long and short 
positions  should  not  be  allowed.  The  notification  should  include  the  breakdown  by  type  of 
financial instruments held to provide the market with detailed information on the nature of the 
holdings. 

However, in order to take into account the differences in ownership concentration, Member 
States should continue to be allowed to set lower national thresholds for notification of major 
holdings than those foreseen in the Transparency Directive where this is necessary to ensure 

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appropriate transparency of holdings. In fact, in some Member States companies are owned 
by  a  small  number  of  shareholders,  each  shareholder  holding  a  significant  percentage  of 
shares. Whereas in other Member States the ownership is dispersed, and a shareholder with a 
relatively small percentage of shares can already exercise a major influence in a company. In 
this latter case, the notification of holdings at a lower threshold than the minimum foreseen in 
the  Transparency  Directive  may  be  required  to  ensure  adequate  transparency  of  major 
holdings. 

- Storage of regulated information 

Access  to  financial  information  on  listed  companies  on  a  pan-European  basis  is  currently 
burdensome: interested parties need to go through 27 different national databases in order to 
search  for  information.  The  level  of  interconnection  between  the  27  national  storage 
mechanisms  is  insufficient.  Therefore,  in  order  to  facilitate  cross  border  access  to  regulated 
information,  the  current  network  of  officially  appointed  storage  mechanisms  should  be 
enhanced. It is proposed that the European Commission receives further delegated powers in 
this  respect,  in  particular  regarding  the  access  to  regulated  information  at  the  Union  level. 
ESMA  should  assist  the  European  Commission  by  developing  draft  regulatory  technical 
standards  concerning,  for  example,  the  operation  of  a  central  access  point  for  the  search  of 
regulated information at the Union level. These measures should also be used to prepare the 
possible future creation of a single European storage mechanism ensuring storage of regulated 
information at the Union level. 

- Reporting of payments to governments 

The  Commission  has  publicly  expressed  support  for  the  Extractive  Industry  Transparency 
Initiative  (EITI),  and  envisaged  willingness  to  present  legislation  mandating  disclosure 
requirements  for  extractive  industry  companies.15  A  similar  pledge  was  made  in  the 
concluding  Declaration  of  the  G8  Summit  in  Deauville  of  May  201116,  where  the  G8 
governments committed "to setting in place transparency laws and regulations or to promoting 
voluntary standards that require or encourage oil, gas, and mining companies to disclose the 
payments they make to governments." Furthermore, the European Parliament has presented a 
Resolution17  reiterating  its  support  for  country-by-country  reporting  requirements,  in 
particular for the extractive industries.  

EU legislation does not currently require issuers to disclose, on a country basis, payments to 
governments  made  in  countries  where  they  operate.  Therefore  such  payments  made  to 
governments in a specific country are normally not disclosed, even though such payments by 
the extractive industry (oil, gas and mining) or loggers18 of primary forests19 can represent a 
significant  proportion  of  a  country's  revenues,  especially  in  third  countries  that  are  rich  in 
natural  resources.  In  order  to  make  governments  accountable  for  the  use  of  these  resources 

15 
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19 

http://www.liberation.fr/monde/01012339133-lutter-contre-l-opacite-des-industries-extractives 
http://ec.europa.eu/commission_2010-2014/president/news/speeches-statements/pdf/deauville-g8-
declaration_en.pdf  
Resolution INI/2010/2102. 
Whether  clear-cutting,  selective  logging  or  thinning,  on  land  classified  as  containing  primary  forest 
areas  or  other  disturbance  of  such  forest  or  forest  land  caused  by  mining,  mineral,  water,  oil  or  gas 
exploration or extraction or other detrimental activities. 
Defined  in  Directive  2009/28/EC  as  "naturally  regenerated  forest  of  native  species,  where  there  is  no 
clearly  visible  indication  of  human  activities  and  the  ecological  processes  are  not  significantly 
disturbed."  

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and  promote  good  governance,  it  is  proposed  to  require  the  disclosure  of  payments  to 
governments  at  the  individual  or  consolidated  level  of  a  company.  The  Transparency 
Directive  requires  issuers  to  disclose  payments  to  governments  by  referring  to  the  relevant 
provisions  of  Directive  2011/../EU  Council  on  the  annual  financial  statements,  consolidated 
financial  statements  and  related  reports  of  certain  types  of  undertakings  which  provides  for 
the detailed requirements in this respect.  

This proposal is comparable to the US Dodd-Frank Act20, which was adopted in July 2010, 
and  requires  extractive  industry  companies  (oil,  gas  and  mining  companies)  registered  with 
the Securities and Exchange Commission (SEC) to publicly report payments to governments21 
on a country- and project-specific basis.  The SEC's implementing rules are scheduled to be 
adopted by the end of 2011. 

- Sanctions and investigation 

In  order  to  provide  for  a  better  implementing  framework  of  the  provisions  of  the  Directive, 
the sanctioning powers of competent authorities are enhanced. In particular, the publication of 
sanctions  is  important  to  improve  transparency  and  to  maintain  confidence  in  the  financial 
markets.  Sanctions  should  normally  be  published,  except 
in  certain  well-defined 
circumstances.  In  addition,  the  competent  authorities  in  the  Member  States  should  have  the 
power to suspend the exercise of voting rights of the issuer who had breached the notification 
rules  on  major  holdings,  as  this  is  the  most  efficient  sanction  to  prevent  a  breach  of  these 
rules. In order to ensure consistent application of sanctions, uniform criteria should be set for 
determining the actual sanction applicable to a person or a company. 

- Other technical adjustments  

Other technical adjustments and clarifications are proposed following the results of the public 
consultation.  

20 
21 

http://www.sec.gov/about/laws/wallstreetreform-cpa.pdf 
Taxes,  royalties,  fees  (including  license  fees),  production  entitlements,  bonuses,  and  other  material 
benefits. 

EN 

9 

   EN 

 
                                                 
2011/0307 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending 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 and Commission Directive 2007/14/EC  

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 50 and Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Central Bank1, 

Having regard to the opinion of the European Economic and Social Committee2, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

  According to Article 33 of 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/EC3,  the  Commission  was  to 
report  on  the  operation  of  that  Directive  to  the  European  Parliament  and  to  the 
Council, including on the appropriateness of ending the exemption for existing debt 
securities after the 10-year period as provided for by Article 30(4) of that Directive 
and its potential impact on the European financial markets. 

  On  27  May  2010  the  Commission  adopted  a  report  on  the  operation  of  Directive 
2004/109/EC4  which  identified  areas  where  the  regime  created  by  that  Directive 
could be improved. In particular, the report demonstrates the need to provide for the 
simplification of certain issuers' obligations with a view to making regulated markets 
more  attractive  to  small  and  medium-sized  issuers  raising  capital  in  the  Union. 

1 
2 
3 
4 

OJ C , , p. . 
OJ C , , p. . 
OJ L 390, 31.12.2004, p. 38. 
COM (2010), 243 final. 

EN 

10 

   EN 

 
                                                 
(3) 

(4) 

(5) 

(6) 

(7) 

Furthermore,  the  effectiveness  of  the  existing  transparency  regime  needs  to  be 
improved, notably with respect to the disclosure of corporate ownership. 

  In  addition,  in  its  Communication  to  the  European  Parliament,  the  Council,  the 
Economic and Social Committee and the Committee of the Regions entitled 'Single 
Market  Act,  Twelve  levers  to  boost  growth  and  strengthen  confidence,  Working 
together  to  create  new  growth'5,  the  Commission  identifies  the  need  to  review 
Directive 2004/109/EC in order to make the obligations applicable to listed small and 
medium-sized enterprises more proportionate, whilst guaranteeing the same level of 
investor protection.  

  According  to  the  Commission  report  and  to  the  Commission  Communication,  the 
administrative burden associated with obligations linked to admission to trading  on 
regulated markets should be reduced for small and medium-sized issuers in order to 
improve  their  access  to  capital.  The  obligations  to  publish  interim  management 
statements  or  quarterly  financial  reports  represent  an  important  burden  for  issuers 
whose  securities  are  admitted  to  trading  on  regulated  markets,  without  being 
necessary  for  investor  protection.  They  also  encourage  short-term  performance  and 
discourage  long-term  investment.  In  order  to  encourage  sustainable  value  creation 
and  long-term  oriented  investment  strategy  it  is  essential  to  reduce  short-term 
pressure on issuers and to give investors incentive to adopt a longer term vision. The 
requirement  to  publish  interim  management  statements  should  therefore  be 
abolished. 

  In  order  to  ensure  that  the  administrative  burden  is  effectively  reduced  across  the 
Union, Member States should not be allowed to continue to impose the requirement 
to publish interim management statements in their national legislation. 

  To further reduce the administrative burden for small and medium-sized issuers and 
to  ensure  the  comparability  of  information,  the  European  Supervisory  Authority 
(European  Securities  and  Markets  Authority,  hereinafter  'ESMA'),  established  by 
Regulation  (EU)  No  1095/2010  of  the  European  Parliament  and  of  the  Council6, 
should  issue  guidelines,  including  standard  forms  or  templates,  to  specify  which 
information should be included in the management report.  

  In  order  to  provide  for  enhanced  transparency  of  payments  made  to  governments, 
issuers  whose  securities  are  admitted  to  trading  on  a  regulated  market  and  which 
have  activities  in  the  extractive  or  logging  of  primary  forest  industries  should 
disclose in a separate report on an annual basis payments made to governments in the 
countries  in  which  they  operate.  The  report  should  include  types  of  payments 
comparable to those disclosed under the Extractive Industries Transparency Initiative 
(EITI) and provide civil society with information to hold governments  of resource-
rich countries to account for their receipts from the exploitation of natural resources. 
The  initiative  is  also  complementary  to  the  EU  FLEGT  Action  Plan  (Forest  Law 
Enforcement,  Governance  and  Trade)7  and  the  Timber  Regulation8  which  require 

5 
6 
7 

COM(2011) 13.4.2010, 206 final. 
OJ L 331, 15.12.2010, p. 84. 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:347:0001:0006:EN:PDF 

EN 

11 

   EN 

 
                                                 
(8) 

(9) 

(10) 

(11) 

(12) 

traders of timber products to exercise due diligence in order to prevent illegal wood 
from entering into the EU market. The detailed requirements are defined in Chapter 9 
of Directive 2011/../EU of the European Parliament and of the Council9. 

  Financial  innovation  has  lead  to  the  creation  of  new  types  of  financial  instruments 
that give investors economic exposure to companies, the disclosure of which has not 
been provided in Directive 2004/109/EC. Those instruments can be used to acquire 
secret  stocks  in  companies,  which  could  result  in  market  abuse  and  give  a  false 
picture of economic ownership of publicly listed companies. In order to ensure that 
issuers and investors have full knowledge of the structure of corporate ownership, the 
definition of financial instruments in that Directive should cover all instruments with 
similar economic effect to holding shares and entitlements to acquire shares.  

  In  addition,  in  order  to  ensure  adequate  transparency  of  major  holdings,  where  a 
holder  of  financial  instruments  exercises  its  entitlement  to  acquire  shares  and  the 
total holdings of physical shares exceed the notification threshold without affecting 
the overall percentage of the previously notified holdings, a new notification should 
be required to disclose the change in the nature of the holdings. 

  A harmonised regime for notification of major holdings of voting rights, especially 
regarding  aggregation  of  holdings  of  shares  with  holdings  of  financial  instruments, 
should  improve  legal  certainty,  enhance  transparency  and  reduce  administrative 
burden for cross-border investors. Member States should therefore not be allowed to 
adopt  stricter  or  divergent  rules  in  that  area  than  those  provided  in  Directive 
2004/109/EC.  However,  taking  into  account  the  existing  differences  in  ownership 
concentration  in  the  Union,  Member  States  should  continue  to  be  allowed  to  set 
lower thresholds for notification of holdings of voting rights. 

  Technical  standards  should  ensure  consistent  harmonisation  of  the  regime  for 
notification of major holdings and adequate transparency levels. It would be efficient 
and  appropriate  to  entrust  ESMA  with  the  elaboration  of  draft  regulatory  technical 
standards  which  do  not  involve  policy  choices,  for  submission  to  the  Commission. 
The Commission should adopt the draft regulatory technical standards developed by 
ESMA to specify the conditions for the application of existing exemptions from the 
notification  requirements  for  major  holdings  of  voting  rights.  Using  its  expertise, 
ESMA should in particular determine the cases of exemptions while taking account 
of their possible misuse to circumvent notification requirements. 

  In  order  to  take  account  of  technical  developments,  the  power  to  adopt  acts  in 
accordance with Article 290 of the Treaty on the Functioning of the European Union 
should be delegated to the Commission to modify the method to calculate the number 
of  voting  rights  relating  to  financial  instruments,  to  specify  the  types  of  financial 
instruments  subject  to  notification  requirements  and  to  specify  the  contents  of 
notification of major holdings of financial instruments. It is of particular importance 
that the Commission carry out appropriate consultations during its preparatory work, 

8 

9 

Regulation  (EU)  No  995/2010  of  the  European  Parliament  and  of  the  Council  of  20  October  2010. 
Companies  that  import  wood  products  under  EU  voluntary  agreements  will  be  exempt  from 
this requirement. 
OJ L, , p.. 

EN 

12 

   EN 

 
                                                                                                                                                         
(13) 

(14) 

(15) 

(16) 

including  at  expert  level.  The  Commission,  when  preparing  and  drafting  up  of 
delegated acts, should ensure a simultaneous, timely and appropriate transmission of 
relevant documents to the European Parliament and the Council. 

  To  facilitate  cross-border  investment,  investors  should  be  able  to  easily  access 
regulated  information  for  all  listed  companies  in  the  Union.  However,  the  current 
network  of  national  officially  appointed  storage  mechanisms  for  regulated 
information does not ensure an easy search for such information across the Union. In 
order  to  ensure  cross-border  access  to  information  and  to  take  account  of  technical 
developments in financial markets and in communication technologies, the power to 
adopt  acts  in  accordance  with  Article  290  of  the  Treaty  on  the  Functioning  of  the 
European  Union  should  be  delegated  to  the  Commission  to  specify  minimum 
standards for dissemination of regulated information, access to regulated information 
at  Union  level  and  central  storage  mechanism  of  regulated  information.  The 
Commission, with assistance of ESMA, should also be empowered to take measures 
to  improve  the  functioning  of  the  network  of  national  officially  appointed  storage 
mechanisms and develop technical criteria for access to regulated information at the 
Union level, in  particular  concerning the operation of a central access point for the 
search of regulated information at the Union level.  

  In order to improve compliance with the requirements of Directive 2004/109/EC and 
following  the  Communication  from  the  Commission  of  9  December  2010  entitled 
'Reinforcing sanctioning regimes in the financial sector'10, the sanctioning powers of 
competent  authorities  should  be  enhanced  and  should  satisfy  certain  essential 
requirements.  In  particular,  competent  authorities  should  be  able  to  suspend  the 
exercise of voting rights for holders of shares and financial instruments who do not 
comply with the notification requirements and to impose pecuniary sanctions which 
are sufficiently high to be dissuasive. To ensure sanctions have a dissuasive effect on 
the  public  at  large,  sanctions  should  normally  be  published,  except  in  certain  well-
defined circumstances.  

  In  order  to  clarify  the  treatment  of  non-listed  securities  represented  by  depository 
receipts admitted to trading on a regulated market and in order to avoid transparency 
gaps, the definition of 'issuer' should be further specified to include issuers of non-
listed securities represented by depository receipts admitted to trading on a regulated 
market. It is  also  appropriate to  amend the definition of 'issuer'  taking into account 
that in some Member States issuers can be natural persons with securities admitted to 
trading on regulated markets. 

  All issuers whose securities are admitted to trading on a regulated market within the 
Union should fall under supervision by a competent authority of a Member State to 
ensure  that  they  comply  with  their  obligations.  Issuers  who,  according  to  Directive 
2004/109/EC,  have  to  choose  their  home  Member  State  but  who  have  not  done  so 
could  avoid  being  supervised  by  any  competent  authority  in  the  Union.  Therefore, 
Directive 2004/109/EC should be amended to include an assumption of a choice of a 
home Member State for issuers that have not communicated the choice of their home 
Member State to the competent authorities within a three-month period. 

10 

COM(2010) 716 final. 

EN 

13 

   EN 

 
                                                 
(17) 

(18) 

(19) 

  According to Directive 2004/109/EC, the choice of a home Member State is valid for 
three years. However, when a third country issuer is no longer listed on the regulated 
market in its home Member State and only remains listed in one host Member State, 
there is no relationship of such issuer with its originally chosen home Member State. 
Such  issuer  should  be  allowed  to  choose  its  host  Member  State  as  its  new  home 
Member State before the expiration of the three-year period. 

  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 market11 contains in particular 
rules  concerning  the  notification  of  the  choice  of  the  home  Member  State  by  the 
issuer. To avoid that competent authorities of the Member State where the issuer has 
its registered office are not informed about the choice of home Member State by the 
issuer,  all  issuers  should  be  required  to  communicate  the  choice  of  their  home 
Member State to the competent authority of the Member State where they have their 
registered  office,  if different from their home Member State.  Directive  2007/14/EC 
should therefore be amended accordingly. 

  The  requirement  of  Directive  2004/109/EC  regarding  disclosure  of  new  loans  has 
lead to many implementation problems in practice and its application is considered to 
be complex. Furthermore, that requirement overlaps partially with the requirements 
laid down in Directive 2003/71/EC of the European Parliament and of the Council of 
4  November  2003  on  the  prospectus  to  be  published  when  securities  are  offered  to 
the public or admitted to trading and amending Directive 2001/34/EC12 and Directive 
2003/6/EC  of  the  European  Parliament  and  of  the  Council  of  28  January  2003  on 
insider  dealing  and  market  manipulation  (market  abuse)13  and  it  does  not  provide 
much  additional  information  to  the  market.  In  order  to  reduce  unnecessary 
administrative burden for issuers, that requirement should therefore be abolished.  

(20) 

  The  requirement  to  communicate  any  amendment  of  issuer's  instruments  of 
incorporation  or  statutes  to  the  competent  authorities  of  the  home  Member  State 
overlaps  with  the  similar  requirement  of  Directive  2007/36/EC  of  the  European 
Parliament  and  of  the  Council  of  11  July  2007  on  the  exercise  of  certain  rights  of 
shareholders in listed companies14 and can result in confusion regarding the role of 
the  competent  authority.  In  order  to  reduce  unnecessary  administrative  burden  for 
issuers, that requirement should therefore be abolished. 

(21) 

  Directive 95/46 of the European Parliament and of the Council of 24 October 1995 
on the protection of individuals with regard to the processing of personal data and on 
the free movement of such data15 and Regulation (EC) No 45/2001 of the European 
Parliament and of the Council of 18 December 2000 on the protection of individuals 
with regard to the processing of personal data by the EU institutions and bodies and 

11 
12 
13 
14 
15 

OJ L 69, 9.3.2007, p. 27. 
OJ L 345, 31.12.2003, p. 64. 
OJ L 96, 12.4. 2003, p. 16. 
OJ L 184, 14.7.2007, p. 17. 
OJ L 281, 23.11.1995, p. 31. 

EN 

14 

   EN 

 
                                                 
 
on  the  free  movement  of  such  data16,  are  fully  applicable  to  the  processing  of 
personal data for the purposes of this Directive. 

(22) 

  Directives 2004/109/EC and 2007/14/EC should therefore be amended accordingly, 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Amendments to Directive 2004/109/EC 

Directive 2004/109/EC is amended as follows: 

(1) 

Article 2(1) is amended as follows: 

(a)  point (d) is replaced by the following: 

'(d)  'issuer'  means  a  natural  person  or  a  legal  entity  governed  by  private  or 
public  law,  including  a  State,  whose  securities  are  admitted  to  trading  on  a 
regulated market. 

In  case  of  depository  receipts  admitted  to  trading  on  a  regulated  market,  the 
issuer  means  the  issuer  of  the  securities  represented,  whether  those  securities 
are admitted to trading on a regulated market or not;'; 

(b)  point (i) is amended as follows:  

(i) 

in point (ii), the following paragraph is added: 

'In  absence  of  choice  by  the  issuer  within  a  period  of  three  months,  point  (i) 
above shall automatically apply to that issuer;';  

(ii) 

the following point (iii) is added: 

'(iii) 
by way of derogation from points (i) and (ii), an issuer incorporated in 
a  third  country  whose  securities  are  no  longer  admitted  to  trading  on  a 
regulated market in its home Member State but instead are admitted to trading 
in  one  or  more  other  Member  States  may  choose  its  home  Member  State 
amongst  the  Member  States  where  its  securities  are  admitted  to  trading  on  a 
regulated market;'; 

(c) 

the following point (q) is added:  

'(q)  'formal  agreement'  means  an  agreement  which  is  binding  under  the 
applicable law.'.  

(2) 

Article 3(1) is replaced by the following:  

16 

OJ L 8, 12.1.2001, p. 1. 

EN 

15 

   EN 

 
 
 
                                                 
'1. 
The  home  Member  State  may  make  an  issuer  subject  to  requirements  more 
stringent  than  those  laid  down  in  this  Directive,  except  requiring  issuers  to  publish 
periodic information other than annual financial reports referred to in Article 4 and 
half-yearly financial reports referred to in Article 5.  

The  home  Member  State  may  not  make  a  holder  of  shares,  or  a  natural  person  or 
legal  entity  referred  to  in  Articles  10  or  13,  subject  to  requirements  more  stringent 
than  those  laid  down  in  this  Directive,  except  setting  lower  notification  thresholds 
than those laid down in Article 9(1).'. 

(3) 

In Article 4, the following paragraph 7 is added: 

The  European  Securities  and  Markets  Authority  (hereinafter 

'ESMA'), 
'7. 
established by Regulation (EU) No 1095/2010 of the European Parliament and of the 
Council(*), shall issue guidelines, including standard forms or templates, to specify 
the information to be included in the management report. 

__________ 

(*) OJ L 331, 15.12.2010, p. 84.'  

(4) 

In Article 5, the following paragraph 7 is added: 

ESMA shall issue guidelines, including standard forms or templates, to specify 

'7. 
the information to be included in the interim management report.'.  

(5) 

Article 6 is replaced by the following:  

'Article 6  

Report on payments to governments  

Member  States  shall  require  issuers  active  in  the  extractive  or  logging  of  primary 
forest  industries,  as  defined  in  […]  to  prepare,  in  accordance  with  Chapter  9  of 
Directive 2011/../EU of the European Parliament and of the Council (*), a report on 
payments made to governments on an annual basis. The report shall be made public 
at the latest six months after the end of each financial year and shall remain publicly 
available  for  at  least  five  years.  Payments  to  governments  shall  be  reported  at 
consolidated level. 

________ 

(*) OJ L […]'.  

(6) 

Article 8 is amended as follows:  

(a)  Paragraph 1 is replaced by the following: 

 '1. 
Articles 4, 5 and 6 shall not apply to an issuer that is a State, a regional 
or local authority of a State, a public international body of which at least one 
Member  State  is  a  member,  the  ECB,  and  Member  States'  national  central 
banks whether or not they issue shares or other securities.'; 

EN 

16 

   EN 

 
(b) 

 The following paragraph 1a is inserted: 

'1a. 
Articles  4  and  5  shall  not  apply  to  an  issuer  exclusively  of  debt 
securities admitted to trading on a regulated market, the denomination per unit 
of which is at least EUR 100 000 or, in the case of debt securities denominated 
in a currency other than euro, the value of such denomination per unit is, at the 
date of the issue, equivalent to at least EUR 100 000.'; 

(c)  Paragraph 4 is replaced by the following: 

'4. 
By way of derogation from paragraph 1a of this Article, Articles 4 and 
5 shall not apply to issuers of exclusively debt securities the denomination per 
unit  of  which  is  at  least  EUR  50  000  or,  in  the  case  of  debt  securities 
denominated in a currency other than euro, the value of such denomination per 
unit is, at the date of the issue, equivalent to at least EUR 50 000, which have 
already been admitted to trading on a regulated market in the Union before 31 
December 2010, for as long as such debt securities are outstanding.'. 

(7) 

Article 9 is amended as follows:  

(a) 

In paragraph 4, the following subparagraphs are added: 

'ESMA  shall  develop  draft  regulatory  technical standards to specify the cases 
in which the exemption referred to in the first subparagraph applies  to shares 
acquired for a short period of time through underwriting. 

ESMA  shall  submit  those  draft  regulatory  technical  standards  to  the 
Commission by 31 December 2013. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical 
standards  referred  to  in  the  second  subparagraph  of  this  paragraph  in 
accordance  with  Articles  10  to  14  of  Regulation  (EU)  No  1095/2010  of  the 
European Parliament and of the Council.';  

(b)  Paragraph 6 is replaced by the following: 

'6. 
This Article shall not apply to voting rights held in the trading book, as 
defined in Article 11 of Directive 2006/49/EC of the European Parliament and 
of the Council(*), of a credit institution or investment firm provided that:  

(a) 

the voting rights held in the trading book do not exceed 5 %, and  

(b) 

the  voting  rights  attached  to  shares  held  in  the  trading  book  are  not 
exercised  nor  otherwise  used  to  intervene  in  the  management  of  the 
issuer. 

The  5  %  threshold  referred  to  in  point  (a)  of  the  first  subparagraph  of  this 
paragraph  shall  be  calculated  taking  into  account  the  aggregated  number  of 
holdings under Articles 9, 10 and 13. 

EN 

17 

   EN 

 
ESMA shall develop draft regulatory technical standards to specify the method 
of calculation of the 5 % threshold referred to in point (a) of that subparagraph 
in case of a group of companies, taking into account Article 12(4) and (5). 

ESMA  shall  submit  those  draft  regulatory  technical  standards  to  the 
Commission by 31 December 2013. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical 
standards referred to in the third subparagraph of this paragraph in accordance 
with Articles 10 to 14 of Regulation (EU) No 1095/2010. 

_______  

(*) OJ L 177, 30.6.2006, p. 201.'. 

(8) 

Article 13 is amended as follows:  

(a)  Paragraph 1 is replaced by the following:  

The notification requirements laid down in Article 9 shall also apply to 

'1. 
a natural person or legal entity who holds, directly or indirectly: 

(a) 

financial instruments that, on maturity, give the holder, under a formal 
agreement, either the unconditional right to acquire or the discretion as 
to  his  right  to  acquire,  shares  to  which  voting  rights  are  attached, 
already issued, of an issuer whose shares are admitted to trading on a 
regulated market; 

(b) 

financial instruments with economic effects similar to those referred to 
in point (a), whether they give right to a physical settlement or not. 

The  notification  required  shall  include  the  breakdown  by  type  of  financial 
instruments held according to point (a) of the first subparagraph and financial 
instruments held according to point (b) of that subparagraph.'; 

(b)  The following paragraphs 1a and 1b are inserted:  

'1a. 
The number of voting rights shall be calculated by reference to the full 
notional  amount  of  shares  underlying  the  financial  instrument.  For  this 
purpose, the holder shall aggregate and notify all financial instruments relating 
to the same underlying issuer. Only long positions shall be taken into account 
for  the  calculation  of  voting  rights.  Long  positions  shall  not  be  netted  with 
short positions relating to the same underlying issuer. 

ESMA shall develop draft regulatory technical standards to specify the method 
to calculate the number of voting rights referred to in the first subparagraph in 
case of financial instruments referenced to a basket of shares or an index. 

ESMA  shall  submit  those  draft  regulatory  technical  standards  to  the 
Commission by 31 December 2013. 

EN 

18 

   EN 

 
 
Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical 
standards  referred  to  in  the  second  subparagraph  of  this  paragraph  in 
accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010. 

For the purposes of paragraph 1 of this Article, transferable securities; 
1b. 
and options, futures, swaps, forward rate agreements, contracts for differences 
and any other derivative contracts which may be settled physically or in cash, 
shall  be  considered  to  be  financial  instruments,  provided  they  satisfy  the 
conditions set out in points (a) and (b) of paragraph 1. 

ESMA  shall  establish  and  periodically  update  an  indicative  list  of  financial 
instruments that are subject to notification requirements according to paragraph 
1, taking into account technical developments on financial markets.'; 

(c)  Paragraph 2 is replaced by the following:  

The Commission shall be empowered to adopt by means of delegated 
'2. 
acts  in  accordance  with  Article  27(2a),  (2b)  and  (2c),  and  subject  to  the 
conditions of Articles 27a and 27b, measures to: 

(a) 

(b) 

(c) 

modify the method to calculate the number of voting rights relating to 
the financial instruments referred to in paragraph 1a; 

specify  the  types  of  instruments  to  be  considered  as  financial 
instruments within the meaning of paragraph 1b; 

specify  the  contents  of  the  notification  to  be  made,  the  notification 
period  and  to  whom  the  notification  is  to  be  made,  as  referred  to  in 
paragraph 1.'; 

(d)  The following paragraph 4 is added:  

'4. 
The exemptions laid down in Article 9(5) and (6) and in Article 12(3), 
(4) and (5) shall apply mutatis mutandis to the notification requirements under 
this Article. 

ESMA shall develop draft regulatory technical standards to specify the cases in 
which  the  exemptions  referred  to  in  the  first  subparagraph  apply  to  financial 
instruments held by a natural person or a legal entity fulfilling orders received 
from  clients  or  responding  to  a  client's  requests  to  trade  otherwise  than  on  a 
proprietary basis, or hedging positions arising out of such dealings. 

ESMA  shall  submit  those  draft  regulatory  technical  standards  to  the 
Commission by 31 December 2013. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical 
standards  referred  to  in  the  second  subparagraph  of  this  paragraph  in 
accordance with Articles 10 to 14 of Regulation (EU) No 1095/2010.'. 

(9) 

The following Article 13a is inserted: 

'Article 13a 

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Aggregation 

1. 
The  notification  requirements  laid  down  in  Articles  9,  10  and  13  shall  also 
apply  to  a  natural  person  or  a  legal  entity  when  the  number  of  voting  rights  held 
directly  or  indirectly  by  such  person  or  entity  under  Articles  9  and  10  aggregated 
with  the  number  of  voting  rights  relating  to  financial  instruments  held  directly  or 
indirectly under Article 13 reaches, exceeds or falls below the thresholds set out in 
Article 9(1).  

The notification required under the first subparagraph of this paragraph shall include 
the  breakdown  of  the  number  of  voting  rights  attached  to  shares  held  according  to 
Articles  9  and  10  and  voting  rights  relating  to  financial  instruments  within  the 
meaning of Article 13. 

2. 
Voting rights relating to financial instruments that have already been notified 
according to Article 13 shall be notified again when the natural person or the legal 
entity  has  acquired  the  underlying  shares  and  such  acquisition  results  in  the  total 
number  of  voting  rights  attached  to  shares  issued  by  the  same  issuer  reaching  or 
exceeding the thresholds of Article 9(1).'. 

(10)  Article 16(3) is deleted.  

(11) 

In Article 19(1), the second subparagraph is deleted.  

(12)  Article 21(4) is replaced by the following:  

'4. 
The Commission shall be empowered to adopt, by means of delegated acts in 
accordance  with  Article  27(2a),  (2b)  and  (2c),  and  subject  to  the  conditions  of 
Articles  27a  and  27b,  measures  to  specify  the  following  minimum  standards  and 
rules:  

minimum  standards  for  the  dissemination  of  regulated  information,  as 

(a) 
referred to in paragraph 1;  

minimum standards for the central storage mechanism as referred to in 

(b) 
paragraph 2; 

rules  concerning 

information  and 
(c) 
the  national  officially  appointed 
communication 
mechanisms  and  the  access  to  regulated  information  at  the  Union  level,  as 
referred to in paragraph 2. 

the 
technologies  used  by 

interoperability  of 

the 

The Commission may also specify and update a list of media for the dissemination of 
information to the public.'. 

(13)  Article 22 is replaced by the following: 

'Article 22 

Access to regulated information at the Union level 

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1.  ESMA  shall  develop  draft  regulatory  technical  standards  setting  technical 
requirements regarding access to regulated information at the Union level in order to 
specify the following:  

the  technical  requirements  regarding  the  interoperability  of  the 
(a) 
information  and  communication  technologies  used  by  the  national  officially 
appointed mechanisms; 

the technical requirements for the operation of a central access point for 

(b) 
the search of regulated information at the Union level;  

the  technical  requirements  regarding  the  use  of  a  unique  identifier  for 

(c) 
each issuer by the national officially appointed mechanisms; 

the  common  format  for  storing  regulated  information  by  national 

(d) 
officially appointed mechanisms; 

(e) 
the  common  classification  of  regulated  information  by  national 
officially  appointed  mechanisms  and  the  common  list  of  types  of  regulated 
information. 

2. 
In developing the draft regulatory technical standards, ESMA shall ensure that 
the  technical  requirements  specified  in  Article  22(1),  are  compatible  with  the 
technical  requirements  for  the  electronic  network  of  national  company  registers  set 
up by the Directive 2011/../EU of the European Parliament and of the Council(*). 

ESMA shall submit those draft regulatory technical standards to the Commission by 
31 December 2014. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred to in the first subparagraph of this paragraph in accordance with Articles 10 
to 14 of Regulation (EU) No 1095/2010.' 

________ 

(*) OJ L […]'.  

(14)  The following title is inserted after Article 27b: 

'CHAPTER VIa 

SANCTIONS' 

(15)  Article 28 is replaced by the following:  

'Article 28 

Sanctions 

1.  Member  States  shall  provide  that  their  respective  competent  authorities  may 
take appropriate administrative sanctions and measures where the national provisions 
adopted  in  the  implementation  of  this  Directive  have  not  been  complied  with,  and 

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shall ensure  that they are applied. Those sanctions  and  measures  shall  be  effective, 
proportionate and dissuasive. 

2.  Member  States  shall  ensure  that  where  obligations  apply  to  legal  persons,  in 
case  of  a  breach,  sanctions  can  be  applied  to  the  members  of  administrative, 
management or supervisory bodies of the legal person, and to any other person who 
under national law is responsible for the breach. 

Competent authorities shall be given all investigative powers that are necessary 
3. 
for  the  exercise  of  their  functions.  In  the  exercise  of  their  sanctioning  and 
investigative  powers,  competent  authorities  shall  cooperate  closely  to  ensure  that 
sanctions  or  measures  produce  the  desired  results  and  coordinate  their  action  when 
dealing with cross border cases.'. 

(16)  The following Articles 28a, 28b and 28c are inserted: 

'Article 28a 

Specific provisions 

1. 

This Article shall apply in all the following circumstances: 

failure by the issuer to make public information required under Articles 

(a) 
4, 5, 6 and 16 within the required time limit; 

(b) 
failure  by  the  natural  or  the  legal  person  to  notify  the  acquisition  or 
disposal of a major holding according to Articles 9, 10, 13 and 13a within the 
required time limit. 

2.  Without  prejudice  to  the  supervisory  powers  of  competent  authorities  in 
accordance with Article 24, Member States shall ensure that in the cases referred to 
in paragraph 1 of this Article, the administrative sanctions and measures that can be 
applied include at least the following:  

a  public  statement  which  indicates  the  natural  or  the  legal  person  and 

(a) 
the nature of the breach; 

an order requiring the natural or the legal person to cease the conduct 

(b) 
and to desist from a repetition of that conduct; 

(c) 
the  power  to  suspend  the  exercise  of  voting  rights  attached  to  shares 
admitted to trading on a regulated market if the competent authority finds that 
the provisions of this Directive, concerning notification of major holdings have 
been  infringed  by  the  holder  of  shares  or  other  financial  instruments,  or  a 
person or entity referred to in Articles 10 or 13; 

in case of a legal person, administrative pecuniary sanctions of up to 10 
(d) 
%  of  the  total  annual  turnover  of  that  legal  person  in  the  preceding  business 
year;  

in case of a natural person, administrative pecuniary sanctions of up to 

(e) 
EUR 5 000 000; 

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(f) 
administrative  pecuniary  sanctions  of  up  to  twice  the  amount  of  the 
profits  gained  or  losses  avoided  because  of  the  breach  where  those  can  be 
determined. 

For  the  purposes  of  point  (d)  of  the  first  subparagraph,  where  the  legal  person  is  a 
subsidiary  of  a  parent  undertaking,  the  relevant  total  annual  turnover  shall  be  the 
total annual turnover resulting from the consolidated account of the ultimate parent 
undertaking in the preceding business year. 

For the purposes of point (e) of the first subparagraph, in the Member States where 
the Euro is not the official currency, the corresponding value to EUR 5 000 000 in 
the  national  currency  shall  be  calculated  taking  into  account  the  official  exchange 
rate on [the date of entry into force of this Directive – insert date].  

Article 28b 

Publication of sanctions 

Member  States  shall  ensure  that  the  competent  authorities  publish  any  sanction  or 
measure imposed for breach of the national provisions adopted in the implementation 
of this Directive without undue delay, including information on the type and nature 
of the  breach and the  identity of  persons responsible for it, unless such publication 
would  seriously  jeopardise  the  stability  of  financial  markets.  Where  publication 
would cause a disproportionate damage to the parties involved, competent authorities 
shall publish the sanctions on an anonymous basis. 

Article 28c 

Effective  application  of  sanctions  and  exercise  of  sanctioning  powers  by 
competent authorities 

1.  Member  States  shall  ensure  that  when  determining  the  type  of  administrative 
sanctions  or  measures  and  the  level  of  administrative  pecuniary  sanctions,  the 
competent authorities shall take into account all relevant circumstances, including: 

(a) 

the gravity and the duration of the breach; 

(b) 

the degree of responsibility of the responsible natural or legal person;  

(c) 
the  financial  strength  of  the  responsible  natural  or  legal  person,  as 
indicated  by  the  total  turnover  of  the  responsible  legal  person  or  the  annual 
income of the responsible natural person; 

the  importance  of  profits  gained  or  losses  avoided  by  the  responsible 

(d) 
natural or legal person, insofar as they can be determined; 

the losses for third parties caused by the breach, insofar as they can be 

(e) 
determined; 

the level of cooperation of the responsible natural or legal person with 

(f) 
the competent authority; 

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(g) 

previous breaches by the responsible natural or legal person. 

2. 
ESMA shall issue guidelines addressed to competent authorities in accordance 
with  Article  16  of  Regulation  (EU)  No  1095/2010  on  types  of  administrative 
measures and sanctions and level of administrative pecuniary sanctions.'. 

(17)  Article 29 is replaced by the following: 

'Article 29 

Right of appeal 

Member States shall ensure that decisions and measures taken in pursuance of laws, 
regulations and administrative provisions adopted in accordance with this Directive 
are subject to the right of appeal.'.  

(18)  Article 31(2) is replaced by the following: 

'2.  Where  Member  States  adopt  measures  pursuant  to  Articles  3(1),  8(2),  8(3)  or 
Article 30, they shall immediately communicate those measures to the Commission 
and to the other Member States.'. 

Article 2 

Amendments to Directive 2007/14/EC 

Directive 2007/14/EC is amended as follows: 

(1) 

In Article 2, the following paragraph is added:  

'In  addition,  an  issuer  incorporated  in  the  Union,  shall  communicate  its  choice  of 
home  Member  State  to  the  competent  authorities  of  the  Member  State  where  such 
issuer is incorporated, if different from the home Member State.'. 

(2) 

(3) 

1. 

In Article 11, paragraphs 1 and 2 are deleted.  

Article 16 is deleted. 

Article 3 

Transposition 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions  necessary  to  comply  with  this  Directive  by  […] at the latest. They  shall 
forthwith  communicate  to  the  Commission  the  text  of  those  provisions  and  a 
correlation table between those provisions and this Directive. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

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2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

Article 4 

Entry into force 

This Directive shall enter into force on the [twentieth] day following that of its publication in 
the Official Journal of the European Union. 

Article 5 

Addressees 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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