Notification Rules Flashcards
Before Announcement/ Bid (Inside Information)
Absolute Secrecy
Market soundings , Insider Lists , Chinese Walls & NDA
After Announcement/ Bid (Inside Information)
Full , Fair and immediate disclosure
no false markets - free access to all the info
Notification of Major Shareholdings Law
Disclosure & Transparency Rules 5 (DTR 5)
part of the FCA Handbook
DTR Rules apply to which shareholdings
Holdings in any company with shares
traded on a regulated market (main market of LSE)
or prescribed market (AIM)
When do you have notify
If holding of 3% +
Ongoing notification if changes 1% +- (up or down)
Voting Agreements = (2 + Shareholders) Aggregate holdings , sum the shares together (vote together)
Key Point regarding notifications
Ignore Decimal Points
- 9% + 0.1% = Disclose
- 0% + 0.8% = No Disclose
Remember to disclose when it drops below 3%
When notifying who is it made to
Person tells company
Company then makes public disclosure via Regulatory Information Service
FCA also has to be notified
Time Limit for the notification
Two Trading Days
AND
Disclosure by company to RIS by next trading day
Exceptions from notification requirements
1) Holdings of Investment Managers ( Private Wealth Managers) + CIS (Fund) Operators
notification threshold - 5,10,15,20,25,30,50,75 %
2) Holdings of market makers
notification threshold - 10% (and 1%+ changes above 10%)
3) Stock Loans / Collateral
No notification ( so long as the borrower does not exercise voting rights)
Company Law Provision
Enquires by company under CA 2006 s793
Gives ability to audit shareholders registers
Applies to all PLCs
backdate up to 3 years
10% shareholders may initiate enquiry
Criminal Penalties (two years in jail +or fine|)
Company sanctions (court approval) = no dividends paid, no votes , can’t sell shares
