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Company Law Reform Bill [HL]


Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

438

 

(b)   

from being a proportion equal to a designated proportion to a

proportion greater or less than that designated proportion, or

(c)   

from being a proportion greater than a designated proportion to

a proportion equal to or less than that designated proportion.

(6)   

In subsection (5) “designated” means designated by the rules.

5

89C     

Provision of information by issuers

(1)   

Transparency rules may make provision requiring the issuer of voting

shares, in circumstances specified in the rules—

(a)   

to make public information to which this section applies, or

(b)   

to notify the competent authority of information to which this

10

section applies,

   

or to do both.

(2)   

This section applies to the following information—

(a)   

the information required by Articles 4 to 6 of the transparency

obligations directive;

15

(b)   

voteholder information—

(i)   

notified to the issuer, or

(ii)   

relating to the proportion of voting rights held by the

issuer in respect of voting shares in the issuer;

(c)   

information relating to the issuer’s capital;

20

(d)   

information relating to the rights attached to the shares or other

securities issued by the issuer (including the total number of

voting rights in respect of shares or of shares of a particular

class);

(e)   

information about new loan issues and about any guarantee or

25

security in connection with any such issue.

(3)   

Transparency rules may require notification of voteholder information

relating to the proportion of voting rights held by an issuer in respect

of voting shares in the issuer—

(a)   

initially, not later than such date as may be specified in the rules

30

for the purposes of the second indent of Article 30.2 of the

transparency obligations directive, and

(b)   

subsequently, in accordance with the following provisions.

(4)   

Transparency rules under subsection (3)(b) may require notification of

voteholder information relating to the proportion of voting rights held

35

by an issuer in respect of voting shares in the issuer only where there is

a notifiable change in the proportion of—

(a)   

the total voting rights in respect of shares in the issuer, or

(b)   

the total voting rights in respect of a particular class of share in

the issuer,

40

   

held by the issuer.

(5)   

For this purpose there is a “notifiable change” in the proportion of

voting rights held by a person when the proportion changes—

(a)   

from being a proportion less than a designated proportion to a

proportion equal to or greater than that designated proportion,

45

(b)   

from being a proportion equal to a designated proportion to a

proportion greater or less than that designated proportion, or

 
 

Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

439

 

(c)   

from being a proportion greater than a designated proportion to

a proportion equal to or less than that designated proportion.

(6)   

In subsection (5) “designated” means designated by the rules.

89D     

Transparency rules: interpretation etc

(1)   

For the purposes of sections 89A to 89E—

5

(a)   

the voting rights in respect of any voting shares are the voting

rights attached to those shares,

(b)   

a person is to be regarded as holding the voting rights in respect

of the shares—

(i)   

if, by virtue of those shares, he is a shareholder within

10

the meaning of Article 2.1(e) of the transparency

obligations directive;

(ii)   

if, and to the extent that, he is entitled to acquire, dispose

of or exercise those voting rights in one or more of the

cases mentioned in Article 10(a) to (h) of the

15

transparency obligations directive;

(iii)   

if he holds, directly or indirectly, a financial instrument

which results in an entitlement to acquire the shares and

is an Article 13 instrument, and

(c)   

a person holds a “comparable instrument” in respect of voting

20

shares if he holds, directly or indirectly, a financial instrument

in relation to the shares which has similar economic effects to an

Article 13 instrument (whether or not the financial instrument

results in an entitlement to acquire the shares).

(2)   

Transparency rules under section 89A(4)(b) may make different

25

provision for different descriptions of comparable instrument.

(3)   

For the purposes of sections 89A to 89E two or more persons may, at the

same time, each be regarded as holding the same voting rights.

(4)   

In those sections—

“Article 13 instrument” means a financial instrument of a type

30

determined by the European Commission under Article 13(2)(a)

of the transparency obligations directive;

“UK market” means a market that is situated or operating in the

United Kingdom;

“voting shares” means shares—

35

(a)   

to which voting rights are attached, and

(b)   

which are shares of an issuer whose shares have been

admitted to trading on a market (whether a regulated

market or not).

89E     

Transparency rules: other supplementary provisions

40

(1)   

Transparency rules that require a person to make information public

may include provision authorising the competent authority to make the

information public in the event that the person fails to do so.

(2)   

The competent authority may make public any information notified to

the authority in accordance with transparency rules.

45

 
 

Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

440

 

(3)   

Transparency rules may make provision by reference to any provision

of any rules made by the Panel on Takeovers and Mergers under Part

24 of the Company Law Reform Act 2006.

(4)   

Sections 89A to 89D and this section are without prejudice to any other

power conferred by this Part to make Part 6 rules.”.

5

896     

Competent authority’s power to call for information

In Part 6 of the Financial Services and Markets Act 2000 (c. 8) after the sections

inserted by section 895 above insert—

“Power of competent authority to call for information

89F     

Competent authority’s power to call for information

10

(1)   

The competent authority may by notice in writing given to a person to

whom this section applies require him—

(a)   

to provide specified information or information of a specified

description, or

(b)   

to produce specified documents or documents of a specified

15

description.

(2)   

This section applies to—

(a)   

an issuer of securities in respect of whom transparency rules

have effect;

(b)   

a voteholder;

20

(c)   

an auditor of—

(i)   

an issuer to whom this section applies, or

(ii)   

a voteholder;

(d)   

a person who controls a voteholder;

(e)   

a person controlled by a voteholder;

25

(f)   

a director or other similar officer of an issuer to whom this

section applies;

(g)   

a director or other similar officer of a voteholder or, where the

affairs of a voteholder are managed by its members, a member

of the voteholder.

30

(3)   

This section applies only to information and documents reasonably

required in connection with the exercise by the competent authority of

functions conferred on it by or under sections 89A to 89E (transparency

rules).

(4)   

Information or documents required under this section must be

35

provided or produced—

(a)   

before the end of such reasonable period as may be specified,

and

(b)   

at such place as may be specified.

(5)   

If a person claims a lien on a document, its production under this

40

section does not affect the lien.

89G     

Requirements in connection with call for information

(1)   

The competent authority may require any information provided under

that section to be provided in such form as it may reasonably require.

 
 

Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

441

 

(2)   

The competent authority may require—

(a)   

any information provided, whether in a document or otherwise,

to be verified in such manner as it may reasonably require;

(b)   

any document produced to be authenticated in such manner as

it may reasonably require.

5

(3)   

If a document is produced in response to a requirement imposed under

this section, the competent authority may—

(a)   

take copies of or extracts from the document; or

(b)   

require the person producing the document, or any relevant

person, to provide an explanation of the document.

10

(4)   

In subsection (3)(b) “relevant person”, in relation to a person who is

required to produce a document, means a person who—

(a)   

has been or is a director or controller of that person;

(b)   

has been or is an auditor of that person;

(c)   

has been or is an actuary, accountant or lawyer appointed or

15

instructed by that person; or

(d)   

has been or is an employee of that person.

(5)   

If a person who is required under this section to produce a document

fails to do so, the competent authority may require him to state, to the

best of his knowledge and belief, where the document is.

20

89H     

Power to call for information: supplementary provisions

(1)   

In sections 89F and 89G (power of competent authority to call for

information)—

“control” and “controlled” have the meaning given by subsection

(2) below;

25

“specified” means specified in the notice;

“voteholder” means a person who—

(a)   

holds voting rights in respect of any voting shares for

the purposes of sections 89A to 89E (transparency rules),

or

30

(b)   

is treated as holding such rights by virtue of rules under

section 89A(4)(b).

(2)   

For the purposes of those sections a person (“A”) controls another

person (“B”) if—

(a)   

A holds a majority of the voting rights in B,

35

(b)   

A is a member of B and has the right to appoint or remove a

majority of the members of the board of directors (or, if there is

no such board, the equivalent management body) of B,

(c)   

A is a member of B and controls alone, pursuant to an

agreement with other shareholders or members, a majority of

40

the voting rights in B, or

(d)   

A has the right to exercise, or actually exercises, dominant

influence or control over B.

(3)   

For the purposes of subsection (2)(b)—

(a)   

any rights of a person controlled by A, and

45

(b)   

any rights of a person acting on behalf of A or a person

controlled by A,

 
 

Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

442

 

   

are treated as held by A.”.

897     

Powers exercisable in case of infringement of transparency obligation

In Part 6 of the Financial Services and Markets Act 2000 (c. 8), after the sections

inserted by section 896 above insert—

“Powers exercisable in case of infringement of transparency obligation

5

89I     

Public censure of issuer

(1)   

If the competent authority finds that an issuer of securities admitted to

trading on a regulated market situated or operating in the United

Kingdom is failing or has failed to comply with an applicable

transparency obligation, it may publish a statement to that effect.

10

(2)   

If the competent authority proposes to publish a statement, it must give

the issuer a warning notice setting out the terms of the proposed

statement.

(3)   

If, after considering any representations made in response to the

warning notice, the competent authority decides to make the proposed

15

statement, it must give the issuer a decision notice setting out the terms

of the statement.

(4)   

A notice under this section must inform the issuer of his right to refer

the matter to the Tribunal (see section 89L) and give an indication of the

procedure on such a reference.

20

(5)   

In this section “transparency obligation” means an obligation under—

(a)   

a provision of transparency rules, or

(b)   

any other provision made in accordance with the transparency

obligations directive.

(6)   

In relation to an issuer whose home state is a member state other than

25

the United Kingdom, any reference to an applicable transparency

obligation must be read subject to section 100A(2).

89J     

Power to suspend or prohibit trading of securities

(1)   

This section applies to securities admitted to trading on a regulated

market situated or operating in the United Kingdom.

30

(2)   

If the competent authority has reasonable grounds for suspecting that

an applicable transparency obligation has been infringed by the issuer,

it may require the market operator to suspend trading in the securities

for a period not exceeding 10 days.

(3)   

If the competent authority has reasonable grounds for suspecting that

35

an applicable transparency obligation has been infringed—

(a)   

by an issuer whose home state is not the United Kingdom, or

(b)   

by voteholders of an issuer whose home state is the United

Kingdom,

   

it may require the market operator to prohibit trading in the securities.

40

(4)   

If the competent authority finds that an applicable transparency

obligation has been infringed, it may require the market operator to

prohibit trading in the securities.

 
 

Company Law Reform Bill [HL]
Part 36 — Transparency obligations and related matters

443

 

(5)   

In this section “transparency obligation” means an obligation under—

(a)   

a provision contained in transparency rules, or

(b)   

any other provision made in accordance with the transparency

obligations directive.

(6)   

In relation to an issuer whose home state is a member state other than

5

the United Kingdom, any reference to an applicable transparency

obligation must be read subject to section 100A(2).

89K     

Procedure under section 89J

(1)   

A requirement under section 89J takes effect—

(a)   

immediately, if the notice under subsection (2) states that that is

10

the case;

(b)   

in any other case, on such date as may be specified in the notice.

(2)   

If the competent authority—

(a)   

proposes to exercise the powers in section 89J in relation to a

person, or

15

(b)   

exercises any of those powers in relation to a person with

immediate effect,

   

it must give that person written notice.

(3)   

The notice must—

(a)   

give details of the competent authority’s action or proposed

20

action;

(b)   

state the competent authority’s reasons for taking the action in

question and choosing the date on which it took effect or takes

effect;

(c)   

inform the recipient that he may make representations to the

25

competent authority within such period as may be specified by

the notice (whether or not he had referred the matter to the

Tribunal);

(d)   

inform him of the date on which the action took effect or takes

effect;

30

(e)   

inform him of his right to refer the matter to the Tribunal (see

section 89L) and give an indication of the procedure on such a

reference.

(4)   

The competent authority may extend the period within which

representations may be made to it.

35

(5)   

If, having considered any representations made to it, the competent

authority decides to maintain, vary or revoke its earlier decision, it

must give written notice to that effect to the person mentioned in

subsection (2).

89L     

Right to refer matters to the Tribunal

40

A person—

(a)   

to whom a decision notice is given under section 89I (public

censure), or

(b)   

to whom a notice is given under section 89K (procedure in

connection with suspension or prohibition of trading),

45

may refer the matter to the Tribunal.”.

 
 

 
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