1. This reference for a preliminary ruling concerns the interpretation of Article 21 of Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities (OJ 2001 L 184, p. 1).
2. The reference was made in the context of proceedings before the Simvoulio tis Epikratias (Council of State) brought by Dionik Anonimi Etairia Emporias I/I, Logismikou & Parokhis Ipiresion Mikhanografisis (‘Dionik AE’), a company established under Greek law, and Mr Pikoulas, a member of the board of directors of that company, against the Epitropi Kefalaiagoras (Capital Market Commission, ‘the CMC’), regarding fines imposed on them by the CMC owing to the inaccuracy of certain information contained in listing particulars (a prospectus) published in connection with an increase in that company’s capital. Legal context Directive 2001/34
3. Directive 2001/34 codifies the following four directives: - Council Directive 79/279/EEC of 5 March 1979 coordinating the conditions for the admission of securities to official stock exchange listing (OJ 1979 L 66, p. 21); - Council Directive 80/390/EEC of 17 March 1980 coordinating the requirements for the drawing up, scrutiny and distribution of the listing particulars to be published for the admission of securities to official stock exchange listing (OJ 1980 L 100, p. 1); - Council Directive 82/121/EEC of 15 February 1982 on information to be published on a regular basis by companies the shares of which have been admitted to official stock-exchange listing (OJ 1982 L 48, p. 26), and - Council Directive 88/627/EEC of 12 December 1988 on the information to be published when a major holding in a listed company is acquired or disposed of (OJ 1988 L 348, p. 62).
4. Recitals (5), (11) and (31) in the preamble to Directive 2001/34 are worded as follows: ‘(5) Initially, this coordination of the conditions for admission of securities to official listing should be sufficiently flexible to enable account to be taken of present differences in the structures of securities markets in the Member States and to enable the Member States to take account of any specific situations with which they may be confronted. … (11) These differences [between the safeguards required by the majority of the Member States, both as regards the contents and the layout of the listing particulars and the efficacy, methods and timing of the check on the information given therein] should be eliminated by coordinating the rules and regulations without necessarily making them completely uniform, in order to achieve an adequate degree of equivalence in the safeguards required in each Member State to ensure the provision of information which is sufficient and as objective as possible for actual or potential security holders. … (31) A policy of adequate information of investors in the field of transferable securities is likely to improve investor protection, to increase investors’ confidence in securities markets and thus to ensure that securities markets function correctly.’
5. Article 20 of Directive 2001/34 states: ‘Member States shall ensure that the admission of securities to official listing on a stock exchange situated or operating within their territories is conditional upon the publication of an information sheet, hereinafter referred to as “listing particulars”, in accordance with Chapter I of Title V.’
6. Article 21 of that directive provides: ‘1. The listing particulars shall contain the information which, according to the particular nature of the issuer and of the securities for the admission of which application is being made, is necessary to enable investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the issuer and of the rights attaching to such securities. 2. Member States shall ensure that the obligation referred to in paragraph 1 is incumbent upon the persons responsible for the listing particulars as provided for in heading 1.1 of Schedules A and B of Annex I hereto.’
7. Article 22(1) of the Directive provides: ‘Without prejudice to the obligation referred to in Article 21, Member States shall ensure that, subject to the possibilities for exemptions provided for in Articles 23 and 24, listing particulars contain, in as easily analysable and comprehensible a form as possible, at least the items of information provided for in Schedules A, B or C of Annex I, depending on whether shares, debt securities or certificates representing shares are involved.’
8. Article 23 of Directive 2001/34 states: ‘Without prejudice to Article 39(1), Member States may allow the competent authorities responsible for checking the listing particulars within the meaning of this Directive, to provide for partial or complete exemption from the obligation to publish listing particulars in the following cases: (1) where the securities for which admission to official listing is applied for are: (a) securities which have been the subject of a public issue … ...’
9. Article 64 of that directive provides: ‘Without prejudice to Article 49(2), in the case of a new public issue of shares of the same class as those already officially listed, the company shall be required, where the new shares are not automatically admitted, to apply for their admission to the same listing, either not more than a financial year after their issue or when they become freely negotiable.’
10. Article 100 of the Directive provides: ‘Every significant new factor capable of affecting assessment of the securities which arises between the time when the listing particulars are adopted and the time when stock exchange dealings begin shall be covered by a supplement to the listing particulars, scrutinised in the same way as the latter and published in accordance with procedures to be laid down by the competent authorities.’
11. Annex I to Directive 2001/34 comprises a group of provisions concerning the layout of listing particulars for the admission of securities to official stock exchange listing. Schedules A and B concern the admission of shares and the admission of debt securities respectively. Under Chapter 1 of those Schedules A and B, entitled ‘Information concerning those responsible for listing particulars and the auditing of accounts’, heading 1.1 requires the inclusion of the following information: ‘[Name and function of natural persons and name and registered office of] legal persons responsible for the listing particulars or, as the case may be, for certain parts of them, with, in the latter case, an indication of those parts.’ Directive 2003/71/EC
12. Article 5(1) of 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 (OJ 2003 L 345, p. 64) provides: ‘Without prejudice to Article 8(2), the prospectus shall contain all information which, according to the particular nature of the issuer and of the securities offered to the public or admitted to trading on a regulated market, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and losses, and prospects of the issuer and of any guarantor, and of the rights attaching to such securities. This information shall be presented in an easily analysable and comprehensible form.’
13. Article 6 of that directive, entitled ‘Responsibility attaching to the prospectus’, provides: ‘1. Member States shall ensure that responsibility for the information given in a prospectus attaches at least to the issuer or its administrative, management or supervisory bodies, the offeror, the person asking for the admission to trading on a regulated market or the guarantor, as the case may be. The persons responsible shall be clearly identified in the prospectus by their names and functions or, in the case of legal persons, their names and registered offices, as well as declarations by them that, to the best of their knowledge, the information contained in the prospectus is in accordance with the facts and that the prospectus makes no omission likely to affect its import. 2. Member States shall ensure that their laws, regulation[s] and administrative provisions on civil liability apply to those persons responsible for the information given in a prospectus. However, Member States shall ensure that no civil liability shall attach to any person solely on the basis of the summary, including any translation thereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus.’
14. Article 25 of Directive 2003/71, entitled ‘Sanctions’, states: ‘1. Without prejudice to the right of Member States to impose criminal sanctions and without prejudice to their civil liability regime, Member States shall ensure, in conformity with their national law, that the appropriate administrative measures can be taken or administrative sanctions be imposed against the persons responsible, where the provisions adopted in the implementation of this Directive have not been complied with. Member States shall ensure that these measures are effective, proportionate and dissuasive. 2. Member States shall provide that the competent authority may disclose to the public every measure or sanction that has been imposed for infringement of the provisions adopted pursuant to this Directive, unless the disclosure would seriously jeopardise the financial markets or cause disproportionate damage to the parties involved.’ Greek national law Law No 1969/1991
15. Article 72(2) of Law No 1969/1991 (FEK A’ 167), as amended by Article 96(1) of Law No 2533/1997 (FEK A’ 228, ‘Law No 1969/1991’), provides: ‘A fine of up to GRD five hundred million (500 000 000) shall be imposed by the [CMC] on natural or legal persons who publish or disseminate in any way inaccurate or misleading information regarding securities being admitted to listing or already listed on an official stock exchange that by its nature may affect the price of or dealings in those securities … This provision shall also apply to members of the board of directors of companies applying for admission of their shares to a recognised stock exchange, where the inaccurate or misleading information is contained in the listing particulars required for the purposes of the abovementioned admission or is published or disseminated in any way.’
16. Article 76(10) of Law No 1969/1991 provides: ‘Without prejudice to application of the relevant provisions of criminal law, the [CMC] shall have the power to impose a fine of up to GRD one hundred million (100 000 000) and, in the event of a second or subsequent offence, up to GRD two hundred million (200 000 000) on natural or legal persons who infringe the legislation concerning the capital market, or orders of the Minister for Economic Affairs or decisions of the [CMC] with regulatory content’ Presidential Decree No 348/1985
17. It follows from Article 1 of Presidential Decree No 348/1985 (FEK A’ 125), as amended by Law No 2651/1998 (FEK A’ 248, ‘Presidential Decree No 348/1985’), that the purpose of the Decree is to render the legislation on official stock exchange listing consistent with Directive 80/390 as amended by Directive 94/18/EC of the European Parliament and of the Council of 30 May 1994 (OJ 1994 L 135, p. 1).
18. According to Article 2(1) thereof, the Decree concerns securities which are the subject of an application for admission to official listing on the Athens Stock Exchange.
19. Article 3(a) of Presidential Decree No 348/1985 states that the expression ‘securities’ covers, inter alia, shares.
20. Article 4(1) of that Decree provides that admission of securities to official listing on the Athens Stock Exchange is conditional upon publication of the listing particulars as previou sly approved by the Board of Administration of that stock exchange.
21. Article 5 of Presidential Decree No 348/1985 provides: ‘1. The listing particulars shall contain the information which, according to the particular nature of the issuer and of the securities for the admission of which application is being made, is necessary to enable investors and their investment advisers to make an informed assessment of the assets and liabilities, financial position, profits and losses and prospects of the issuer and of the rights attaching to such securities. 2. The obligation referred to in paragraph 1 shall be incumbent upon the persons responsible for the listing particulars as provided for in heading 1.1 in Annexes A and B hereto.’
22. Article 24 of that Decree provides: ‘Every significant new factor capable of affecting assessment of the securities which arises between the time when the listing particulars are adopted and the time when dealing on the Stock Exchange begins shall be covered by a supplement to the listing particulars, scrutinised in the same way as the latter and published in accordance with Article 21 of this Presidential Decree.’
23. Under Article 26 of the same Decree: ‘Appended to this Decree are three annexes (A, B and C) which constitute an integral part hereof and provide: Annex A - Model for listing particulars for the admission of shares to listing on the Athens Stock Exchange - Chapter 1. Information concerning those responsible for listing particulars and the auditing of accounts. 1.1. Name and function of natural persons and name and registered office of legal persons responsible for the listing particulars or, as the case may be, for certain parts of them, with, in the latter case, an indication of those parts …’ The dispute in the main proceedings and the question referred for a preliminary ruling
24. During the period from 20 February 2001 to 20 March 2001, Dionik AE, the shares of which were listed on the parallel market of the Athens Stock Exchange, increased its share capital. To that end, on 4 December 2000, Dionik AE submitted to the Board of Administration of the Athens Stock Exchange an application for approval of that increase in its share capital and of the listing particulars established for that purpose.
25. Those listing particulars included information regarding the recent development and prospects of Dionik AE for the then current financial year 1 January to 31 December 2000 and assessments concerning the development of the sales and profits and losses of the company during that financial year.
26. Chapter 4 of those listing particulars, relating to information regarding their compilation and the auditors of the company’s accounts, identified the chairman of the board of directors and the managing director of Dionik AE as those responsible for the compilation and accuracy of the information contained therein.
27. The Board of Administration of the Athens Stock Exchange, by decision of 8 February 2001, approved the increase in Dionik AE’s capital and the listing particulars established for that purpose.
28. Before those listing particulars were approved, Dionik AE had drawn up summary annual financial statements for the financial year 1 January to 31 December 2000, which were published in the press on 28 February 2001.
29. On subsequently reviewing the forecasts set out in the listing particulars, the Supervision and Audit Directorate of the CMC found that the estimated figures on the profit‑and‑loss position for the financial year 2000 which were included in those listing particulars differed significantly from the profits and losses for that financial year as they appeared in the summary annual financial statements published on 28 February 2001.
30. After obtaining certain explanations from Dionik AE, the CMC, considering it likely that that company had infringed the provisions of Law No 1969/1991 and Article 24 of Presidential Decree No 348/1985, called on it to submit observations. That request was also made to Mr Pikoulas, a member of the board of directors of Dionik AE, who was not, however, identified in the listing particulars at issue as responsible for the accuracy of the information contained therein.
31. By decisions of 27 June 2002, the CMC imposed on Dionik AE a total fine of EUR 90 000 for infringement of Article 24 of Presidential Decree No 348/1985 and of Article 72(2) of Law No 1969/1991, and on each member of the board of directors a fine of EUR 60 000 for infringement of Article 72(2) of Law No 1969/1991.
32. In those decisions, the CMC held that the listing particulars at issue contained inaccurate and misleading information on the profits and losses for the financial year 2000, in particular as to pre‑tax profits, in respect of which it found that there was a difference of over 40%.
33. The CMC also found that, on publication of those listing particulars, Dionik AE and the members of its board of directors already knew that the estimated profits and losses for the financial year 2000 contained in the listing particulars differed significantly from those actually achieved.
34. The CMC also stated that the measures taken by Dionik AE, namely publishing the summary annual financial statements in February 2001 and giving information to potential investors, through the Panellinios Sillogos Ependiton Krimatistiriou Athinon (Panhellenic Association of Athens Stock Exchange Investors), and to its shareholders, were not in compliance with Article 24 of Presidential Decree No 348/1985, which requires publication of a supplement to the listing particulars should a significant new event capable of affecting the assessment of securities occur.
35. Dionik AE and Mr Pikoulas brought actions before the Simvoulio tis Epikratias seeking annulment of the CMC’s decisions of 27 June 2002.
36. Against that background, the Simvoulio tis Epikratias decided to stay the proceedings and to refer the following question to the Court for a preliminary ruling: ‘In the light of Article 21 of Directive 2001/34 …, can a national legislature lay down, for cases where the information recorded in listing particulars proves to be inaccurate or misleading, administrative penalties imposable not only upon the persons expressly mentioned in those particulars as responsible but also upon the issuer of the securities being admitted to listing on a stock exchange and, indiscriminately, upon the members of its board of directors, regardless of whether the board members have been identified as responsible in the abovementioned sense?’ The question referred for a preliminary ruling Admissibility
37. The Italian Government claims that the increase in Dionik AE’s capital was not subject to the preparation and presentation of listing particulars, and that, consequently, the facts of the main proceedings do not fall within the scope of Directive 2001/34.
38. Since the question whether the rules allegedly infringed are exclusively national or rather of Community origin is thus not clearly determined, the Italian Government considers that the question referred for a preliminary ruling is hypothetical and must therefore be dismissed as inadmissible.
39. According to Article 23 of Directive 2001/34, Member States may allow the competent authorities responsible for checking listing particulars within the meaning of that directive to provide for partial or complete exemption from the obligation to publish listing particulars in certain specific cases. These include the situation covered by Article 23(1)(a), referred to at the hearing by the Commission. However, Article 23 leaves the Member States discretion as to the application of such an exemption.
40. In that context, Article 64 of Directive 2001/34 provides, however, that, where newly issued shares of the same class are not automatically admitted to listing, the issuer is to be required to apply for their admission to listing.
41. In the present case, it is, however, not clear from the circumstances of the main proceedings as set out by the national court that Dionik AE came within one of the exemptions from the requirement to publish listing particulars, provided for by Article 23 of Directive 2001/34.
42. Moreover, Dionik AE confirmed at the hearing that the shares issued in connection with the increase in capital were not automatically admitted to listing within the meaning of Article 64 of Directive 2001/34, that the purchase of those shares was open to the public, subject to the pre‑emption rights enjoyed by existing shareholders, and that heading 1.1 of Schedule A to that directive was therefore applicable.
43. Accordingly, the plea of inadmissibility raised by the Italian Government must be rejected. Substance
44. As a preliminary point it should be noted that it is clear from recitals (5), (11) and (31) in the preamble to Directive 2001/34 that the purpose of that directive is, inter alia, to ensure adequate information of investors in the field of transferable securities in order to improve investor protection, to increase investors’ confidence in securities markets and thus to ensure that those markets function correctly, without, however, national rules and regulations necessarily being the subject of complete harmonisation.
45. Therefore, as the Advocate General pointed out in point 32 of her Opinion, Directive 2001/34 does not aim to achieve a high level of harmonisation of the national rules and regulations in the sector concerned.
46. Accordingly, the Member States are free to set additional or stricter conditions for admitting securities to listing, provided that the resulting system is consistent with the objectives of Directive 2001/34.
47. It follows that the national legislature may lay down rules imposing liability on the persons expressly mentioned in the listing particulars published for the purpose of admission to listing as well as other categories of person, even where the latter persons are not expressly mentioned in those listing particulars, provided that such rules are consistent with the objectives of Directive 2001/34.
48. In that context, it is necessary to point out that Article 21(1) of the Directive provides that listing particulars are to contain the information which is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the issuer and of the rights attaching to the securities for the admission of which application is being made.
49. Article 21(2) of Directive 2001/34 states that Member States must ensure that that obligation is incumbent upon the persons as provided for in heading 1.1 of Schedules A and B of Annex I to that directive. Those schedules refer only to the natural or legal persons responsible for the listing particulars or for a part thereof.
50. In view of the objective of Directive 2001/34, which is to ensure, inter alia, adequate information of investors, the identification of persons responsible for the information in the listing particulars which is necessary to investors, as provided for by Article 21 in conjunction with Schedules A and B of Annex 1 to that directive, could not be regarded as exhaustive, in that responsibility for the accuracy of the information contained in those listing particulars could not be incumbent only upon the natural or legal persons mentioned therein, regardless of the true economic and organisational circumstances of the share issue.
51. It is conceivable that the listing particulars published with a view to admitting securities to official stock exchange listing will not mention the identity of certain persons, whether natural or legal, who are responsible for the management of the issuer or capable of producing and assessing information on the assets and liabilities, financial position, profits and losses, and prospects of that issuer and of determining the rights attaching to the securities. Accordingly, the competent national authorities cannot be prevented from providing for the liability of such persons in respect of inaccurate or misleading information contained in the listing particulars.
52. It must be added that Directive 2001/34 does not expressly provide for a system of penalties applicable to the persons on whom responsibility for the listing particulars is incumbent. The obligation of the Member States to provide for administrative penalties against issuers and other persons responsible for listing particulars was laid down only by Article 25 of Directive 2003/71, which postdates the events in the main proceedings and, consequently, does not apply to them.
53. In those circumstances, it is necessary to point out that, in the absence of harmonisation of the Community legislation in the field of penalties applicable where conditions laid down by arrangements under such legislation are not observed, the Member States are empowered to choose the penalties which seem appropriate to them. They must, however, exercise that power in accordance with Community law and its general principles, and consequently with the principle of proportionality (see, to that effect, Case 68/88 Commission v Greece [1989] ECR 2965, paragraph 23, Case C-210/91 Commission v Greece [1992] ECR I‑6735, paragraph 19, and Case C-36/94 Siesse [1995] ECR I-3573, paragraph 21).
54. In particular, the administrative or punitive measures must not go beyond what is necessary for the objectives pursued and a penalty must not be so disproportionate to the gravity of the infringement that it becomes an obstacle to the freedoms enshrined in the EC Treaty (see Case C-210/91 Commission v Greece , paragraph 20). It is, however, for the national court to determine, in the light of the foregoing considerations, whether the penalties provided for by the applicable national legislation are proportionate.
55. As to the obligation to give investors genuine and sufficient information, laid down by Directive 2001/34, the fact remains that a system of civil, criminal or administrative penalties established at national level in respect of the persons expressly mentioned in the listing particulars, the issuer and the members of its board of directors, regardless of whether the board members have been identified as responsible in those listing particulars, does not run counter to the objective of that directive where the system is proportionate to the gravity of the infringement which is to give inaccurate or misleading information in the listing particulars.
56. Having regard to all of the foregoing, the answer to the question referred for a preliminary ruling must be that Article 21 of Directive 2001/34 is to be interpreted as meaning that it does not preclude a national legislature from laying down, for cases where the information recorded in listing particulars published with a view to admitting securities to official stock exchange listing proves to be inaccurate or misleading, administrative penalties imposable not only upon the persons expressly mentioned in those particulars as responsible for them but also upon the issuer of the securities and, indiscriminately, upon the members of the issuer’s board of directors, regardless of whether the board members have been identified as responsible in the listing particulars. Costs
57. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.