Transparency Directive Amendment - immediate actions for listed companies

The final provisions of the Transparency Directive Amending Directive (2013/50/EU) (TDAD) will be implemented on 26 November 2015 though a combination of amendments to the Financial Conduct Authority's (FCA) Disclosure and Transparency Rules (DTR) and the Financial Services and Markets Act 2000. Various provisions are already in force, including in relation to the abolition of the need for issuers to publish interim management statements.

Two changes coming into force on 26 November 2015 may require issuers to whom the TDAD applies to take action in advance of that implementation date in relation to:

  • the notification to the FCA of the identity of an issuer's home Member State; and
  • the period in relation to which annual and half-yearly reports must be kept available to the public.

Home Member State notifications

From 26 November, all issuers must disclose the location of their home Member State to:

  • the competent authority of the Member State where it has its registered office, where applicable;
  • the competent authority of the home Member State; and
  • the competent authorities of all host Member States.

These rules will be contained in DTR 6.4.2. – 6.4.4.

The European Securities and Markets Authority (ESMA) has published a standard form which the FCA has adopted for this purpose and which it expects issuers with securities admitted to trading on a regulated market and who are required to make disclosure to the FCA to complete and email to tdhomestate@fca.org.uk . In turn, the FCA will forward this information to ESMA.

Article 2(1)(i) of the Transparency Directive (2004/109/EC) determines the home Member State of an issuer. Where an issuer is incorporated in the European Community, this will be the Member State in which it has its registered office. Thus, for the majority of issuers with securities admitted to trading on the Main Market of the London Stock Exchange, their home Member State will be the United Kingdom. If an issuer has no choice as to the identity of its home Member State and has not already made a notification, it must so by 26 November 2015. If an issuer has a choice and has not yet made a notification, it must do so by 26 February 2016.

As ESMA's standard form contains more information than may have been submitted previously, the FCA has also requested that any issuer which has already submitted its notification does so again.

Further information can be found here.

Availability of annual and half-yearly reports

The TDAD will also increase the period of time which annual and half-yearly reports must remain publicly available from five to 10 years. DTR 4.1.4 and 4.2.2R (3) will be amended accordingly.

In response to a question seeking clarity on the date from which an issuer should apply the new requirements in relation to historic reports, ESMA confirmed that "for those reports that were made publicly available less than 5 years before the transposition date (26 November 2015), the reports should be made publicly available for at least 10 years. This period of time will start counting from the date the reports were originally published and not the transposition date. For those reports that were made publicly available 5 years or more before the transposition date, the requirement of the TDAD will not apply".

In practice, this means that companies should make available for 10 years all annual and half-yearly reports published after 26 November 2010.

Other changes to be implemented on 26 November 2015 include:

  • the extension of the period by which half-yearly reports must be published from two to three months from the half-year end (DTR 4.2.2 will be revised accordingly); and
  • the extension of the scope of DTR 5, including as a result of the removal of the exemption for stock lending agreements.