Introduction

Shareholder Disclosure rules typically require disclosure to a competent authority and / or to the Issuer.

Typically, disclosure obligations are based on the jurisdictions where the (underlying) stock are admitted to trading.

Simple Cases

Determining the relevant competent authority is in some cases straight-forward, including where:

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    Stocks are admitted to trading in only one country
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    The country of incorporation, country of registration and country of listing are all the same; and
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    The rule is based on a stock list (e.g. Takeover Dealing Disclosures, US 13F Reporting etc.)

Complex Cases

In other cases, determining the correct country or countries can be more difficult, including:

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    Where there are multiple listings in different countries
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    Where there are dual listed shares
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    Depositary receipts (where there is potential to have to disclose in country where the depositary receipt is traded and the country of the underlying asset).
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    Incorporation, country of registration and country of listing are all the same – some jurisdictions require disclosure to be made based on the country of incorporation rather than the listing.

For indirect investment (e.g. derivatives, depositary receipts etc.), we also need to think about both the country where the instrument is and also the country where the underlying instrument is admitted to trading.

Unfortunately, there is no single golden source for providing all the relevant countries of disclosure for a specific issuer. For this reason, we must monitor all the markets/exchanges the securities are listed on and also the additional countries of exposure.

It is vital for clients to be diligent and review the reports provided in Highwire of the countries their holdings are exposed to.

Briefing Paper
Case Studies

RELX is a British multinational information and analytics company headquartered in London, United Kingdom. It’s primary listing is on the London Stock Exchange, however, it is also traded throughout Europe and the United States.

As the shares are traded on a UK regulated market, the holdings in the issuer a potentially subject to a UK disclosure.

As the shares are also traded on EU regulated markets, we must also identify the EU Home Member State where the holdings need to be disclosed should a threshold be breached. In the case of RELX, they have disclosed the Netherlands as the Home Member State.

Additionally, RELX is also traded in the US through ADRs. Therefore, we must also establish if the securities that are traded in the US are section 12 Registered. From an Edgar company search, we can identify that the securities are registered under section 12 of the Exchange Act.

Therefore, an initial disclosure for RELX will be required:

  • In the Netherlands once the 3% threshold is breached;
  • In the UK once the 5% threshold has been breached; and
  • In the US for a 13D or G disclosure once the 5% threshold has been breached.

Additionally, if holdings the RELX Sponsored ADRs, as it is found on the 13F list, a quarterly 13F disclosure may also be required.

DCC plc is an Irish international sales, marketing, and support services group incorporated and registered in Ireland.

Its shares are listed on the London Stock Exchange and it is a constituent of the FTSE 100 Index.

It is also traded in the EU in Germany, France, and the US.

As it is traded on a UK-regulated market, disclosures in the UK are in scope.

Although it is traded in Germany and France, it is not traded on regulated markets. Instead, it is traded on open markets, and therefore is not in scope for disclosure in either jurisdiction.

As it is also traded in the US, we must check that it is section 12 registered. From reviewing the registration documents, it can be found that ordinary shares are not registered under section 12.

Although not traded in Ireland, the fact that the issuer is incorporated in Ireland must also be taken into account. Ireland operates two principal regimes for the notification of interests in securities: a regime implementing the EU Transparency Directive (2004/109/EC) in Ireland that is applicable to securities admitted to trading on an EU regulated market (such as the Main Markets of Euronext Ireland) and a separate and independent regime for the reporting of β€œinterests” in the relevant share capital of public limited companies incorporated in Ireland irrespective of whether the shares are listed on a stock exchange.

Therefore, the relevant jurisdictions for disclosures in DCC plc are:

  • Ireland
  • United Kingdom
Decision Tree