The European Securities Markets Expert Group (ESME) was set up to provide legal and economic advice to the European Commission on the application of EU securities Directives.

The ESME has published an opinion on the disaggregation of shareholdings. The opinion considers the treatment of investment management businesses under certain EU Directives which can have the effect of requiring holdings controlled by an investment manager to be aggregated with other holdings within the group. The purpose of the opinion is to examine if these requirements are consistent, to consider if any inconsistencies are justifiable and to consider how they impact on the interests of investment management clients.

In its conclusion the ESME calls on the Commission to consider amendments to the Prudential Assessment Directive and Takeover Directive to bring them into line with the disaggregation rules in the Transparency Directive. However, the ESME also asks the Commission to consider whether additional safeguards are necessary in relation to takeovers (and higher levels of control under the Prudential Assessment Directive) to protect the interests of minority shareholders or the public interest (in relation to financial institutions regulated under the Prudential Assessment Directive). In the meantime the ESME states that Member States should be encouraged to develop a consistent approach to this issue.

View ESME opinion on disaggregation of shareholdings, 18 June 2009