European Union: Update To The Transparency Directive

Last Updated: 10 December 2015
Article by Patrick Quinlan, Stephen McLoughlin and Laurence Morrissey

In 2010 the European Commission (the "Commission") published a report on the operation of Directive 2004/109/EC (the "Transparency Directive") and a consultation paper on modernising the transparency regime for listed companies.

Following industry feedback in November 2013 the Transparency Directive was amended by Directive 2013/50/EU (the "Amending Directive"). This was transposed into Irish law on 26 November 2015 by the Transparency (Directive 2004/109/EC) (Amendment) (no. 2) Regulations 2015.

The Irish transparency regime applies to issuers with securities admitted to trading on EU regulated markets (and not, for example, to issuers with securities admitted to trading on US markets only).

The key changes implemented by the Amending Directive include:

Definition of Issuer

This has been widened to include issuers of unlisted securities represented by depositary receipts admitted to trading on a regulated market and to include 'natural persons'.

Home Member State Definition

An issuer of shares of any denomination or of debt securities for which the denomination per unit is less than €1,000 which is incorporated in a third country can now choose its home Member State from amongst the Member States where its securities are admitted to trading on a regulated market.

Where securities are traded on a regulated market in more than one Member State, all such Member States will be home Member States until an issuer chooses a single home Member State.

An issuer is required to disclose its home Member State in accordance with Articles 20 and 21 of the Transparency Directive.

Integration of Securities Markets

The Transparency Directive permitted Member States to apply more stringent requirements to an issuer than those provided for in the Transparency Directive itself. This discretion has now been restricted by the Amending Directive which provides that Member States are no longer allowed to require issuers to publish periodic financial information on a more frequent basis than that which is set out in the Transparency Directive.

There are exceptions to this rule in the Amending Directive.

Availability of Financial Reports

The annual financial reports and half-yearly financial reports (if prepared) of an issuer must remain publicly available for ten (from five) years.

Half-yearly Financial Reports

The timeframe for publishing half-yearly financial reports has been extended from two to three months from the end of the reporting period.

Interim Management Statements

The requirement for an issuer to publish bi-annual interim management statements or quarterly financial reports has been removed.


The Amending Directive has widened the ambit of issuers to whom Articles 4 and 5 of the Transparency Directive (relating to annual and half-yearly financial reports respectively) shall not apply to include (i) the European Financial Stability Facility ("EFSF"); (ii) any other European financial stability mechanism; and (iii) an exclusive issuer of debt securities admitted to trading on a regulated market. (with minimum unit denominations of €100,000).

In addition, Articles 4 and 5 will not apply to issuers exclusively of debt securities with a minimum unit denomination of €50,000 and which have already been admitted to trading on an EU regulated market before 31 December 2010, for as long as such debt securities are outstanding.

Notification Requirements

The definition of financial instruments has been amended to prevent market abuse.

Article 9 requires notification of the acquisition and disposal of major holdings in shares of relevant issuers. It will now apply to natural and legal persons who hold particular types of financial instruments granting rights to acquire shares or linked economic rights.

The notification required must take account of such financial instruments distinguishing between those with a right to physical or cash settlement. The Central Bank of Ireland has published new disclosure forms for this purpose.

Financial instruments, provided that they meet the criteria in Article 9 may include transferable securities, options, futures, swaps, forward rate agreements, contracts for differences and any other contracts or agreements with similar economic effects which may be settled physically or in cash.

For these notification requirements, the number of voting rights is calculated by reference to the full notional amount of shares underlying the financial instrument, except for cash settled instruments, where voting rights will be calculated on a "delta-adjusted" basis. The holder is required to aggregate and notify all financial instruments relating to the same underlying issuer. Only long positions are taken into account for the calculation of voting rights.

Additional Information

Article 16(3) of the Transparency Directive has been deleted, removing the obligation to disclose any new loan issues, guarantees or security.

Constitutional Documents Amendments

An issuer may now amend its constitutional documents without notifying any competent authorities.


Article 28(a) details the circumstances in which an issuer may be sanctioned. These include the failure within certain time limits of an issuer to make public certain required information or to notify the acquisition or disposal of a major holding (as set out above).

Sanctioning Powers

Article 28(b) details the powers which a competent authority has in the case of an Issuer breach as outlined above. A competent authority can in respect of any breach by a natural person or legal entity:

  1. provide a public statement noting the party responsible;
  2. ensure that the party responsible ceases and refrains from repeating the breach; and/or
  3. impose fines in the case of a legal entity, of up to (i) €10,000,000 or up to 5% of the total annual turnover; or (ii) twice the amount of the profits gained or losses avoided because of the breach and, in the case of a natural person, of up to (i) €2,000,000; or (ii) twice the amount of the profits gained or losses avoided because of the breach, (in each case whichever of (i) or (ii) is the higher).

Member States can also provide for additional sanctions and higher fines.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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