New securities law rules on the duty of notification, financial reporting and publication of sanctions
The Danish Parliament has passed a Bill to amend the Danish Securities Trading, etc Act that enters into force on 26 November 2015.
The most important amendments are reviewed below:
Amended rules on major shareholders' duty of notification
The amendments to the Danish Securities Trading, etc Act entail that the notification rules for listed companies will be extended and made more effective.
- In future the duty of notification will also include equity financial instruments (derivatives) with or without an option to acquire shares in the company in question.
- The rules on the duty of notification for the holding of own shares will be abolished. In future the duty of notification applying to own shares will be laid down in the new provision on major shareholders in section 29 of the Danish Securities Trading, etc Act. It means that in future only one notification is to be submitted.
- A new calculation method for calculating shareholdings will be introduced and a duty of notification will be triggered when a major shareholder's total direct and indirect shareholding and/or voting rights and the holding of equity financial instruments together exceed a notification limit.
When the new calculation method is introduced the duty of notification must be observed in three situations (the three basket principle):
- If the major shareholder's direct and indirect shareholding or the voting rights in a company must be notified;
- If the major shareholder's holding of equity financial instruments (regardless of the financial instrument containing an option to acquire the shares of the company in question, see above) must be notified;
- If the major shareholder's holdings under 1) and 2) must be notified.
- It will be made possible for the Danish Financial Supervisory Authority to sanction gross or repeated violations of the duty of notification by suspending the voting rights attached to the shareholdings in the issuer in question to whom the notification should have been or was submitted.
- The most important rules on the duty of notification in respect of major shareholders will be moved from the Danish Executive Order on Major Shareholders to the Danish Securities Trading, etc Act.
Changed rules for financial reporting
The amendments to the Danish Securities Trading, etc Act also entail that the rules for listed companies' financial reporting will be relaxed.
- The publication requirement of either interim financial statements or quarterly reports is abolished.
- The issuer's deadline for publishing half year reports will be extended from two months to three months from after the expiry of the six-month period.
- The issuer's annual reports and half year reports are now to be made available to the public for minimum ten years.
New rules on publishing sanctions and measures
Finally, the amendments entail that the Danish Financial Supervisory Authority receives increased sanction options as a result of the Bill. In future the Danish Financial Supervisory Authority will also be able to publish supervisory reactions (for example warnings and orders) in respect of natural persons on the Danish Financial Supervisory Authority's website.
The significance of the new rules
The new rules mean that listed companies should review and update their internal securities law rules for the purpose of ensuring compliance with the new rules. The review and updating should be completed when the rules enter into force on 26 November 2015.