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Hector Sants |
On Friday the UK's Financial Services Authority (FSA) published FS06/11 Implementation of the Transparency Directive which sets out the near-final rules for the implementation of the European Union's Transparency Directive (TD). The TD is part of the EU’s Financial Services Action Plan, along with Basel II (the Capital Requirements Directive) and MiFID, and establishes requirements on the disclosure of information about issuers of shares that are traded on regulated markets. A major change in the TD is the lifting of the prohibition on investment companies taking controlling stakes in the companies in which they invest. This directive was passed by the EU in December 2004 and comes into force on January 20th 2007.
The FSA is proposing to supplement the basic requirements of the TD, i.e. to "gold plate" it, to reflect the characteristics of the London markets. Hector Sants, FSA Managing Director of Wholesale Business, said "The market has supported our proposed approach to implementing the Transparency Directive. We note that it has also opted to retain certain features of the existing UK regime that go beyond the Directive requirements, notably in the area of major shareholding notifications".
The FSA will keep certain enhanced reporting requirements which are currently in force in London such as major shareholding requirements, will also maintain the minimum listing regime open to overseas investment companies, and will apply the TD to a wider range of issuers than required. The FSA will transpose the TD into its own rulings with the released document remaining "near-final" as the EC has yet to confirm certain of the technical details (Level).
Sants confirmed "We plan to implement a more principles-based approach to the listing rules for investment entities following the welcome by the industry for our proposals. However, in the light of feedback and recent market developments, we will be revising a number of aspects including the prohibition on investment companies taking controlling stakes in the companies in which they invest and keeping our directive minimum listing regime open to overseas investment companies – a route which we think might be attractive for private equity funds. We hope these measures will help London to maintain its position as the prime centre for raising capital in Europe."
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