DENMARK: Draft Bill on changes to Denmark major shareholdings rules published

Thursday October 16 2014

The Danish securities regulator the FSA has published a draft Bill which, among others, proposes changes to the Denmark major shareholding rules.

The changes are aimed at bringing Denmark’s rules in line with Transparency 2, the amendments to the EU Transparency Directive, which was published in 2013. The main changes concern the requirement to aggregate holdings in cash-settled instruments with holdings in other financial instruments and holdings in shares for the purposes of notification.

Article 29 of the Securities Trading Act is being proposed to be replaced with the following text:

1. Anyone who directly or indirectly holds shares in companies which have issued shares which are admitted to trading either on a regulated market in Denmark or in a country within the European Union or in a country with which the Union has entered into an agreement for the financial area, or on an alternative market in Denmark, shall in accordance with cases identified in paragraph 2 immediately notify the Company and the Authority concerning ownership of shares in the company. After receipt of such notice, the company must urgently publish the content of the message.

2. Notification of shareholding in accordance with paragraph 1 is required when these holdings reach, exceed or fall below the limits of 5, 10, 15, 20, 25, 50 or 90 per cent and the thresholds of one third or two thirds of the share capital or voting rights.

3. The obligation to give notice under subsection 1 also includes voting rights any person or entity is entitled to acquire, dispose of or exercise which are:

1) held by a third party with whom that person or entity has entered into an agreement which commits the parties, by concerted exercise of the voting rights they hold, to a lasting common policy towards the management of the company,

2) held by a third party under an agreement concluded with that person or entity for the temporary transfer of the voting rights in return for a contribution,

3) attached to shares which are pledged as collateral for that person or entity, provided that that they control the voting rights and declare their intention of exercising them,
4) attached to shares in which that person or entity has the life interest,

5) held, or may be exercised as mentioned in no. 1-4 by a company controlled by that person or entity,

6) attached to the shares deposited with that person or entity, who may exercise the same at its discretion in the absence of specific instructions from the shareholders,

7) held by a third party in its own name for that person or entity, or

8) the person or entity may exercise as a proxy where the person or entity can exercise the same at its discretion in the absence of specific instructions from the shareholders.

4. The obligation to give notice under subsection. 1 shall also apply to any person who directly or indirectly owns

1) financial instruments in accordance with an agreement that grants the holder the unconditional right to acquire or choice to acquire shares already issued by companies whose shares are admitted to trading on a regulated market in Denmark or in a country within the European Union or in a country with which the Union has concluded an agreement for the financial area, or are admitted to trading on an alternative market in Denmark, or

2) financial instruments that are not covered by no. 1 but are based on the shares covered by no. 1 which have economic effects that are similar to the effect of no. 1 included financial instruments included under no. 1 above, regardless of whether they give the right to acquire shares or not.

5. The obligation to give notice under subsection 1 shall apply mutatis mutandis to any person or entity if the proportion of the voting rights or share capital directly or indirectly held by the person or entity referred to in paragraphs 1-3, together with the proportion of the voting rights or capital that are linked to financial instruments held directly or indirectly in accordance with paragraph 4 reaches, exceeds or falls below the limits in paragraph 2.

6. The obligation to disclose holdings and notify the FSA, as mentioned in paragraph 1, shall also apply to a company`s holding of treasury shares, the rights to exercise voting rights and financial instruments, as determined in paragraphs 1-5, whether the Company holds these itself or through a person or entity acting in his own name but on its behalf. Subsection 1 does not apply to companies whose shares are admitted to trading solely on an alternative market in Denmark.

7. The FSA shall lay down more detailed rules on the holding and notice of the holding of shares, rights to exercise voting rights and financial instruments in accordance with paragraphs 1-6, and the calculation of holdings of financial instruments. The FSA may lay down rules derogating from its obligations under paragraphs 1-6.

The draft is open for public comment until 21st October 2014.

Click on the above link for the draft Bill (in Danish).