CP15/11: Implementation of the Transparency …

1 CPXX/XXConsultation PaperImplementation of the Transparency directive amending directive ( 2013 /50/EU) and other Disclosure Rule and Transparency Rule ChangesM a rc h 2015CP15/11**Consultation PaperFinancial Conduct Authority1 March 2015CP15/11 Implementation of the Transparency directive amending directive ( 2013 /50/EU) and other Disclosure Rule and Transparency Rule ChangesAbbreviations used in this paper 31 Overview 52 HM Treasury FSMA Implementation 83 DTR Implementation 114 Other TDAD modifications 195 Other proposed DTR changes 21 Annex 1 FCA cost benefit analysis 252 FCA compatibility statement 283 List of questions 30 Appendix 1 Draft FCA Handbook text 35 ContentsThe Financial Conduct Authority and HM Treasury invite comments on this joint Consultation Paper by 20 May can send them in writing to:Kate HinchyMarkets DivisionFinancial Conduct Authority25 The North ColonnadeCanary WharfLondon E14 5 HSTelephone: 020 7066 8832 Email.

2 Is the policy of both the FCA and HM Treasury to make all responses to formal consultation available for public inspection unless the respondent requests otherwise. We will not regard a standard confidentiality statement in an email message as a request for this, we may be asked to disclose a confidential response under the Freedom of Information Act 2000. We may consult you if we receive such a request. Any decision we make not to disclose the response is reviewable by the Information Commissioner and the Information Rights can download this Consultation Paper from our website: All our publications are available to download from If you would like to receive this paper in an alternative format, please call 020 706 0790 or email: or write to: Editorial and Digital team, Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5 HSDaniel WrightFinancial ServicesHM Treasury1 Horse Guards RoadSW1A 2 HQTelephone: 020 7270 7800 Email.

3 Conduct AuthorityMarch 2015 Implementation of the Transparency directive amending directive ( 2013 /50/EU) and other Disclosure Rule and Transparency Rule ChangesCP15/11 Financial Conduct Authority3 Implementation of the Transparency directive amending directive ( 2013 /50/EU) and other Disclosure Rule and Transparency Rule ChangesCP15/11 March 2015 Abbreviations used in this paperCBACost benefit analysisDTRD isclosure Rules and Transparency RulesECEuropean CommissionEFSFE uropean Financial Stability FacilityESMAE uropean Securities and Markets AuthorityEUEuropean UnionFCAF inancial Conduct AuthorityFSMAF inancial Services and Markets Act 2000 LRListing RulesMADM arket Abuse directive (2003/6/EC)MiFIDM arkets in Financial Instruments directive (2004/39/EC)PDProspectus directive (2003/71/EC)RTSR egulatory Technical StandardTDTransparency directive (2004/109/EC)TDADT ransparency directive amending directive ( 2013 /50/EU)TDID Transparency directive Implementing directive (2007/14/EC)the TreasuryHM Treasur yFinancial Conduct Authority5 Implementation of the Transparency directive amending directive ( 2013 /50/EU) and other Disclosure Rule and Transparency Rule ChangesCP15/11 March 20151.

4 This Consultation Paper sets out proposals to implement the Transparency directive amending directive 2013 /50/EU (TDAD), which amends the Transparency directive (TD), the Transparency directive Implementing directive (TDID) and the Prospectus directive (PD). The responsibility for implementing the TDAD is shared between HM Treasury (the Treasury), which has the power to make changes to the Financial Services and Markets Act 2000 (FSMA), and the Financial Conduct Authority (FCA), under its Disclosure Rules and Transparency Rules (DTRs). This is a joint consultation between the Treasury and the FCA. This Consultation Paper delineates the relevant areas of responsibility for each body through the provision of separate commentary and, where applicable, legal drafting.

5 However, you can make a single response to both bodies using the contact details provided in this Consultation Paper. The FCA is also taking this opportunity to propose other miscellaneous changes to the DTRs. The TD creates a framework for companies to adopt similar standards around information disclosure. It focuses on regulated information that has to be disclosed periodically, shareholder disclosures and the dissemination of regulated Following a review of the TD by the European Commission (EC), the TDAD came into force on 26 November 2013 . Each Member State is required to implement the TDAD within 24 months of that date. Early Implementation of specific TDAD amendments At the Treasury s request, the FCA has already implemented the new requirement to report on payments to governments, which is effective for financial years beginning on or after 1 January 2015.

6 Also at the Treasury s request, the FCA has already removed the TD requirement to publish interim management statements. Both changes are reflected in the DTRs contained in the FCA of remaining TDAD amendments The Implementation of the remaining provisions of the TDAD are addressed in this Consultation Paper. Participants have two months to respond: the submission deadline is 20 May 2015. This is a shortened consultation period to allow adequate time for the Treasury to confer the necessary FSMA rulemaking powers on the FCA, and to allow changes to be implemented by the deadline of 26 November TDAD amendments to the The FCA is also taking this opportunity to propose miscellaneous changes to the DTRs that are not required by the TDAD, but will improve or clarify existing rules in the FCA Conduct AuthorityMarch 2015 Implementation of the Transparency directive amending directive ( 2013 /50/EU) and other Disclosure Rule and Transparency Rule ChangesCP15/11 Who does this consultation affect?

7 This Consultation Paper will be of interest to: issuers of securities admitted to trading on a regulated market where the UK acts as homeor host Member State and the FCA s DTRs apply listed companies who are required by , or to comply withDTR4, DTR5 and DTR6 as if they were an issuer for the purposes of the DTRs issuers of securitised derivatives who, pursuant to , the FCA considers shouldcomply with DTR4, DTR5 and DTR6 as if they were an issuer of debt securities as definedin the DTRs issuers of securities admitted to trading on a prescribed market in the UK firms advising issuers firms advising persons investing or dealing in listed securities firms or persons investing or dealing in listed securities primary information providersIs this of interest to consumers?

8 This Consultation Paper will be of interest to consumers who directly or indirectly deal and invest in: listed securities securities admitted to trading on a regulated market or a prescribed marketContext and summary of This Consultation Paper sets out in broad terms the proposed amendments to FSMA that would be implemented by the Treasury. It also details the FCA Implementation through the DTRs, and sets out the proposed rule changes required as a result of the TDAD modifications (aside from the changes already implemented in the UK), including: the requirement to disclose voting rights arising from holdings of financial instruments thathave a similar economic effect to holding shares the extension of the deadline to publish half-yearly reports and the period of time for whichfinancial reports are publicly available changes to the rules on the home Member State a new stabilisation exemptionFinancial Conduct Authority7 Implementation of the Transparency directive amending directive ( 2013 /50/EU)

9 And other Disclosure Rule and Transparency Rule ChangesCP15/11 March 2015 changes to the definition of an The Consultation Paper identifies other modifications to TDAD provisions that may impact the current regime but either do not require new or amended DTRs to implement, or are not required yet. These include: the introduction of minimum administrative measures and sanctions National Storage Mechanism central access point harmonised electronic reporting The FCA has also taken the opportunity to review the DTRs and propose other changes that it has identified as being required to improve the current UK regime. These are set out in Section 5 and include: current treatment of stock lending and borrowing in (5) and (6) the treatment of investment managers under the current drafting of the equivalence provisions for third country issuers (non-EEA issuers) The purpose of this consultation is to obtain feedback from investors, issuers and market participants about our proposals for implementing the TDAD and our proposals on other modifications which may impact the current regime as a result of the TDAD; and also the FCA s proposals on other DTR changes.

10 Equality and diversity The FCA has assessed the likely equality and diversity impacts of its proposals and does not think they give rise to any concerns, but would welcome any We want to know what you think of our proposals. Please send us your comments by 20 May 2015 in We intend to publish our feedback towards the end of the Conduct AuthorityMarch 2015 Implementation of the Transparency directive amending directive ( 2013 /50/EU) and other Disclosure Rule and Transparency Rule ChangesCP15/112. HM Treasury FSMA implementationIntroduction2 .1 This section looks at the measures in the TDAD for which HM Treasury has responsibility. These measures will be implemented in UK law through FSMA. The Government s better regulation policy requires the principle of copy out to be used where possible.