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Large Shareholdings
Introduction

Major Shareholdings Rules are concerned with the holdings, or control over the exercise of voting rights, attached to shares in a company.

In most jurisdictions major holdings in a company requires a disclosure to the regulator and/or the company.

The purpose of the obligation is to improve transparency in the market.

Rules can apply when holdings:

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    Increase
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    Decrease
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    Change as a result of a change to shares in issue

Rules can vary according to:

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    The location of the issuer
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    The regulatory status of the market
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    Global Investments = Multiple Shareholder Disclosure Rules

Some key sets of large shareholding reporting include:

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    EU Transparency Directive (TDAD) Reporting and similar UK reporting.
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    EU Acquisitions Directive.
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    US Section 13d & G Reporting.

Nuances

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    Threshold (5%, 10%, 15%)
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    Calculations and Aggregation
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    Denominator (Total Voting Rights, Issued Share Capital, Total Shares Outstanding)
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    Timelines (T+1, T+2, T+3…)
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    Instruments in scope
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    Method of disclosure (portal, email, registered letter)

Thresholds

EU Transparency Directive – a harmonised approach?

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    Standard Threshold: 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%.
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    3% = Czech Republic, Germany, Italy, Netherlands & Spain.
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    A threshold of one third may be applied instead of 30%.
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    A threshold of two thirds may be applied instead of 60%.

US Schedule 13D, & G

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    5%  initial threshold.

Other jurisdictions

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    Australia: 5% (Relevant interests and substantial holding).
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    Canada: 10% (Early Warning Reporting and alternative monthly reporting).
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    Hong Kong: 5% (Securities and Futures Ordinance Part XV – Disclosure of Interests).

Reportable Interests

EU Transparency Directive – a harmonised approach?

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    Reportable interests have been gold plated in the EU.
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    Total Voting Rights v Issued Capital.

Outside of the EU a reportable interest will vary per jurisdiction:

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    Australia, Hong Kong, Canada, US = Voting Shares.
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    Taiwan, Brazil = All Shares.
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    India, Egypt, = Dual Calculations.

Derivatives and Convertibles

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    Some countries just require physically settled derivatives to be included in the calculation = Australia Major Shareholding Disclosures.
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    Other also include cash settled derivative = EU, Hong Kong & Brazil.
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    Convertibles  referenced to share are reportable in many jurisdictions.
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    EU convertibles referenced to issued shares = disclosable.
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    Watch out for gold-plating regimes = France.
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    Conversion Period –  US convertibles are disclosable if they are convertible within 60 days.
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Shareholder Disclosures e-Learning