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The CSSF recently published revised FAQs regarding the Transparency Act 2008.

Issuers benefiting from an exemption from the requirement under the Transparency Act 2008 to publish, store and file periodic financial reports (for instance, wholesale debt issuers) are nevertheless obliged to publish, store and file, in accordance with the rules applicable to "regulated information" under the Transparency Act 2008, any periodic financial information which they have made available to the public on their own initiative or pursuant to another legal or regulatory requirement.

Background

The Transparency Act 20081 implemented into Luxembourg law 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 (the Transparency Directive). It applies to all issuers of securities admitted to trading on a regulated market which have elected Luxembourg as their home Member State for Transparency Directive purposes (the Issuers and each, an Issuer). One of the requirements of the Transparency Act 2008 imposed on Issuers is to efficiently disclose, store with an Officially Appointed Mechanism and file with the CSSF2 all regulated information (within the meaning of the Transparency Act 2008).

1. Disclosure Of Periodic Financial Information

To the extent that an Issuer has outstanding securities admitted to trading on a regulated market, it has to comply, pursuant to the Transparency Act 2008, with disclosure, storage and filing obligations with respect to regulated information. Regulated information includes, among other things, periodic information comprising annual financial reports and half-yearly financial reports.3

Article 7 of the Transparency Act 2008 provides, among other things, for an exemption from the requirement to publish annual and half-yearly financial reports (the Wholesale Exemption) available to:

  • Issuers of exclusively debt securities admitted to trading on a regulated market the denomination per unit of which is at least EUR100,000 (or the equivalent of that amount, on an issue date, in another currency); and
  • Issuers of exclusively debt securities with a denomination per unit of at least EUR50,000 (or the equivalent of that amount, on an issue date, in another currency) which were admitted to trading on a regulated market before 31 December 2010.

In addition, until 1 January 2015, Issuers of exclusively debt securities admitted to trading on a regulated market prior to 1 January 2005 that, due to their characteristics, are traded almost only by a limited circle of well-informed investors (in accordance with the provisions of the now abolished Grand-ducal regulation of 28 December 1990) are exempted from disclosing half-yearly financial reports. Such exemption is referred to as the Grandfathering Exemption.

2. New CSSF Guidance

The CSSF has clarified, in its frequently asked questions regarding the Transparency Act 2008 (version dated 25 February 2014), its position regarding the obligations of Issuers who benefit from, inter alia, the Wholesale Exemption or the Grandfathering Exemption but nevertheless decide to make their periodic financial information available to the public, whether on their own initiative or in order to comply with certain legal or regulatory obligations other than those under the Transparency Act 2008.

The CSSF stresses in the relevant FAQ that an Issuer alone is responsible for determining if particular information should be considered as inside information4 and whether and when such information should be published. However, in the same FAQ, the CSSF also specifies, that when an Issuer makes its periodic financial information available to the public for the first time, this constitutes, in principle, the publication of inside information for the purposes of the Market Abuse Act 2006.5

The question arises as to whether an Issuer still has the discretion to decide for itself whether a financial report constitutes inside information. The ambiguity stems from the fact that the CSSF qualifies its position by the terms "in principle". In the absence of any further clarification by the CSSF, the safest approach for an Issuer is to publish such reports systematically.

Since inside information (within the meaning of the Market Abuse Act 2006) is part of the definition of regulated information, as such it should be disseminated, stored with the Officially Appointed Mechanism and filed with the CSSF in accordance with the provisions of the Transparency Act 2008. It is not sufficient, in such circumstances, simply to publish the relevant documents on the Issuer's website.

It should be noted, however, that the deadlines for publication of annual financial reports and half-yearly financial reports which are imposed in articles 3 and 4 of the Transparency Act 2008, respectively, are not applicable to periodic financial information published by an Issuer eligible for the Wholesale Exemption or the Grandfathering Exemption. Such reports would need to be published, filed and stored in accordance with the requirements of the Transparency Act 2008 as soon as they have first been made available to the public (on the Issuer's own initiative or pursuant to legal or regulatory rules other than those set out in the Transparency Act 2008). Furthermore, the requirements relating to the contents of financial reports imposed by articles 3 and 4 of the Transparency Act 2008 do not apply in such circumstances, either.

Footnotes

1 The Luxembourg act dated 11 January 2008 on transparency requirements for issuers of securities, as amended (the Transparency Act 2008).

2 The Commission de surveillance du secteur financier (CSSF).

3 As well as quarterly financial reports or interim management statements for issuers whose shares are admitted to trading on a regulated market.

4 According to the Market Abuse Act 2006, inside information means information (i) of a precise nature, (ii) which has not been made public, (iii) which relates, directly or indirectly, to financial instruments or their issuers and (iv) which, if it were made public, would be likely to have significant impact on the price of those financial instruments.

5 The Luxembourg act dated 9 May 2006 relating to market abuse, as amended (the Market Abuse Act 2006).

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.