ANNEX A:: TRANSPOSITION NOTES Part 43: Transparency obligations and related matters – Transparency Directive (2004/109/EC)
1747.Sections 1265, 1266, 1267, 1268, 1270, 1271, and 1272 in Part 43 (Transparency obligations and related matters) of the Act implement 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 amending Directive 2001/34/EC. Section 1266 inserts seven new sections into Part 6 of the Financial Services and Markets Act 2000; sections 89A, 89B, 89C, 89D, 89E, 89F and 89G. The new sections give power to the competent authority (at present the Financial Services Authority (“FSA”)) to make rules for the purposes of the Transparency Directive (2004/109/EC) (“Transparency Directive”) and connected regulatory purposes. Sections 1267 and 1268 insert three and four sections, respectively, into Part 6 of FSMA (89H to 89N) setting out the regulatory powers of the FSA in connection with the Directive. Section 1270 inserts new sections 90A and 90B into FSMA, which set out the issuers’ liability in damages for disclosures required under the Transparency Directive, and section 1271 inserts a new section 100A into FSMA setting out provisions in relation to the exercise of the FSA’s powers where the UK is a host member state.
1748.The Transparency Directive imposes minimum harmonisation requirements on the information to be provided to the public about issuers whose securities are traded on a regulated market and the control of votes attached to shares in those issuers. It permits Home Member States to impose more stringent requirements on entities that they regulate but Host Member States, i.e. those states in which the issuers securities are traded on a regulated market but whose competent authority are not responsible for primary oversight of that issuer, are not permitted to impose any requirements more stringent than those contained in the Transparency Directive.
1749.There are three main categories of obligation that are imposed under the Transparency Directive and that the FSA’s transparency rules will implement in respect of UK markets and issuers:
1750.The detailed and technical provisions about the required notifications, disclosures and treatment of security-holders will be prescribed in rules made by the FSA under the new rule-making power at section 89A of the Financial Services and Markets Act 2000. The FSA is required by that Act to carry out consultation and a cost benefit analysis when making any rules under this power.
1751.Having the power to make these rules will promote the harmonisation of practice with other EU jurisdictions, and help enhance investor confidence through increased transparency of the financial markets.
1752.Responsibility for the transposition of the Transparency Directive lies both with HM Treasury and with the FSA. The measures in the Companies Act that implement the Transparency Directive are the responsibility of HM Treasury.
1753.The table below describes the substantive provisions in the Act implementing the Transparency Directive.