On 1 January 2009 new rules implementing what is known as the Transparency Directive in Dutch law will enter into effect. The aim of the directive is to improve the rules on financial reporting and the notification of major holdings in listed companies. The new rules will further the implementation process, as the directive has already been partially implemented in the Netherlands.

Main changes

A new chapter 5.1a will be added to the Financial Supervision Act (Wet op het financieel toezicht) consolidating the obligations on the furnishing of periodic and incidental (ongoing) information. Some of the obligations were already contained in legislation and stock exchange rules, but several are new. One of the new rules introduces the term "regulated information", which encompasses, among other things, annual and half-yearly financial information, interim statements and information about changes to the rights attached to securities. The obligations to publish regulated information apply in particular to companies whose securities are listed on a (regulated) EU market and whose home Member State is the Netherlands. The obligations do not apply to companies that have only issued debt securities whose denomination per unit amounts to EUR 50,000 or more.

Implementation of the Transparency Directive has also made it necessary to amend Book 2 of the Dutch Civil Code in a few respects. The amendments include the addition of special provisions relating to the financial reporting requirements for listed companies since these will now deviate from the requirements applicable to other companies. The deviating requirements introduced pursuant to the directive include a shorter period (four months) for the publication by listed companies of their annual accounts. In addition, a new provision (Article 2:117(7) Dutch Civil Code) states that the right of shareholders and depositary receipt holders to exercise their rights by proxy may not be limited or excluded by Dutch companies. This prohibition will also be added to the Financial Supervision Act, but will there extend to the exercise of rights by both shareholders and debt securities holders. In addition, the prohibition will also apply to foreign companies whose shares are listed on a regulated EU market and whose home Member State is the Netherlands.

Another change is that the holder of a financial instrument will from now on only have to notify a potential substantial holding in a listed company if it has the unconditional right to acquire, on its own initiative, shares and voting rights in that company. This change is controversial because it will eliminate the notification obligation for a market party who secretly builds up a purely economic position in a listed company (with a view to a possible hostile takeover), for example by entering into derivative contracts such as equity swaps and contracts for differences.

Regulated information

Annual and half-yearly information (shortening of terms and addition of statement by responsible persons)

Within four months after the end of its financial year – i.e. a shorter period than currently applicable – the company will have to make its annual financial information publicly available. The annual financial information consists of the audited annual accounts, the annual report, a description of the main risks and uncertainties facing the company and, for the first time, a statement by persons within the company designated by the latter as the "responsible persons". The statement must indicate, among other things: (i) that the annual accounts give a fair view of the assets and financial position of the company and, in the case of consolidated accounts, of the enterprises included in the consolidation, and (ii) that the annual report gives a fair view of the company's condition on the balance sheet date, the development of the company and its affiliated companies during the previous financial year and all material risks to which the company is exposed. The new rules also include a number of minimum requirements for the financial information that must be published by companies whose corporate seat/registered office is located outside the EU.

Under the new rules, a company must publish its half-yearly information within two months after the end of the first six months of its financial year. The rules of Euronext Amsterdam already impose this obligation on companies listed on that exchange, but it is not presently a statutory requirement. Moreover, the new rules are more demanding with regard to the content of the half-yearly information than the rules of Euronext Amsterdam. For example, the half-yearly financial information must be prepared in accordance with the same accounting principles as the annual financial information.

Both the annual and half-yearly financial information must remain publicly available for at least five years.

Interim statements in first and second half of a company's financial year

Also new is the statutory obligation to publish an interim statement in both the first and second half of a company's financial year. Such statements must be made at least ten weeks after the start, and no more than six weeks before the end, of the relevant half-year period. Companies that already publish quarterly statements are exempted from this obligation.

The interim statements must contain information about the time span from the beginning of the relevant half-year period to the publication of the statement. The information must, at a minimum, include: (i) an explanation of material events and transactions; (ii) the consequences thereof for the company's financial position and (iii) a general description of the company's financial position and performance. Similar information must also be provided regarding the company's controlled undertakings.

Incidental information requirements

A company that is listed on a (regulated) EU market and whose home Member State is the Netherlands must make public without delay any change to the rights attached to its shares or to the rights to acquire its shares. The same applies to changes to the rights attached to securities of such a company that are listed in the EU. Under these rules, publication is required of, for example, changes to the rights and obligations of shareholders under articles of association and changes to conditions, guarantees or security attached to debt securities.

Equal Treatment of Securities Holders

The new rules implementing the Transparency Directive also relate to the treatment of, and furnishing of specific information to, shareholders or, as the case may be, debt securities holders by listed companies whose home Member State is the Netherlands. In short, securities holders in the same position must be treated equally and receive the same information. The "equal treatment principle" is in itself not new, but is now expressed in a number of concrete obligations.

Accordingly, a listed company must ensure that sufficient facilities and information are available in the Netherlands to enable securities holders to exercise their rights. An example of such facilities is the appointment of a paying agent in the Netherlands as required by Euronext Amsterdam.

Moreover, a listed company must, no later than upon the commencement of a general meeting of shareholders, inform shareholders of the total number of shares and votes present at the meeting. It also has an ongoing obligation to provide shareholders with information about the declaration and payment of dividends and about the issue of new shares (including any arrangements for allotment, subscription and conversion). If at a general meeting a vote will be taken on an amendment to the articles of association, the proposed amendment must be sent to both the AFM and the regulated market on which the securities are listed at the time of convocation.

General meetings of debt securities holders must take place in the Netherlands, unless only the holders of securities whose denomination per unit amounts to EUR 50,000 or more are invited.

Method of publication

Pursuant to the new rules, a listed company must make its regulated information publicly available in a non-discriminatory manner via a press release issued simultaneously in the Netherlands and every other EU Member State in which its securities are listed. With regard to annual and half-yearly financial reports as well as interim statements, it is sufficient for the press release to refer to the company's website on which this information is available.

Information other than regulated information, such as information about general meetings, may be conveyed electronically if the meeting of shareholders or, as the case may be, debt securities holders has approved this and a few other conditions are met. Securities holders must, upon request, be able to obtain the information in hard copy.

Euronext rules

Some of the new information requirements are different to those laid down in the rules enforced by Euronext Amsterdam. For example, with regard to the prescribed method of publishing annual and half-yearly information, the new statutory rules require a press release, whereas Euronext Amsterdam requires an advertisement. It is not yet known how Euronext Amsterdam will deal with these differences.

Listed companies must provide Euronext Amsterdam and the AFM with all regulated information that must be made publicly available under the new rules.

The Transparency Directive (2004/109/EC) will be implemented via the Act of 25 September 2008 amending the Financial Supervision Act (which for the most part will enter into force on 1 January 2009) and several other Acts and Decrees.