Consultation launched for lower initial threshold for notification substantial shareholdings
A consultation has been launched proposing to lower the initial notification threshold of a ‘substantial’ shareholding, voting rights or gross short position from 3% to 2% in the issued capital of a qualifying listed company. The existing thresholds (including the 3% threshold) remain in place. According to the explanatory notes, the introduction of the additional notification threshold should - amongst others - enhance the knowledge about (changes in) voting power and capital interest when making investment decisions. It is envisaged that this new legislation enters into force on 1 January 2021.
Introduction of an additional notification threshold
The legislative proposal introduces a new, additional notification obligation to the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, the AFM) when:
(a) an interest of 2% in the issued capital of a qualifying listed company, or
(b) a gross short position representing 2% in the issued capital of a qualifying listed company, or
(c) the ability to vote on at least 2% of the total voting rights related to the issued capital of a qualifying listed company,
is held, reached, exceeded or if an investor falls below this threshold. This would result in a lowering of the current initial threshold from 3% to 2%.
The existing thresholds (including the 3% threshold) will remain in place. The thresholds requiring notification as currently proposed would therefore be 2%, 3%, 5%, 10%, 15%, 20%, 30%, 40%, 50%, 60%, 75% and 95%. According to the explanatory notes, the introduction of the additional 2% notification threshold would provide insight into an important category of stakeholders and is also useful in light of the right of shareholders to place items on the agenda of a general meeting (set at a 3% issued capital threshold). Moreover, as mentioned in the introduction, it would facilitate a well-informed investment decision by (potential) shareholders.
Upon entry into force of the legislation, those with an interest in, a gross short position representing, or an ability to vote on, the issued capital of a qualifying listed company between 2% and 3% would be required to notify the AFM within a four week period. Except for this transitional provision, the term within which the actual notification must be made will remain unchanged and is determined by the moment at which the person knows or should know that the notification obligation has arisen as a consequence of reaching, exceeding or falling below a threshold. Pursuant to the AFM, a person should in this respect know, within at most two trading days after it has acquired or lost disposal of shares or voting rights or a gross short position, whether or not it has reached, exceeded or fallen below a threshold.
The described notification obligations apply - amongst others - to an interest in a Dutch public company listed on a regulated market, such as Euronext Amsterdam.
The legislative consultation runs until 4 July 2019 and can be found here.
If you have any queries, please contact Martijn Schoonewille or Jelmer Kalisvaart of our Capital Markets team.
Although this publication has been compiled with great care, Loyens & Loeff N.V. and all other entities, partnerships, persons and practices trading under the name 'Loyens & Loeff', cannot accept any liability for the consequences of making use of this issue without their cooperation. The information provided is intended as general information and cannot be regarded as advice.