Articles

Corporate Alert

Corporate Alert

Corporate Alert

02.01.2012 NL law

Update Notification Requirements:
Policy rule published and consequences for current positions

1.  AFM published Policy Rule on cash settled instruments 
 
We refer to our corporate alert of last Friday in relation to the entry into force of the amended section 5:45 (10) of the Dutch Financial Supervision Act (the "Wft") on 1 January 2012. The amendment introduced a new notification requirement for large positions in cash settled instruments. The AFM has now published a policy rule in relation to the new notification requirement.

The policy rule indicates how interests in cash settled instruments must be calculated. Cash settled instruments will have to be reported on a delta adjusted basis as of 1 October 2012. The 'delta' of a derivative position shows how the payout of that derivative changes in relation to a change in the price of the underlying share. However, until 30 September 2012 such positions may also be reported on the basis of the nominal value of the shares represented by a cash settled instrument. When notifying interests in cash settled instruments on the basis of nominal values, an explanatory note must be filed setting out the main terms of the instrument. This allows third parties to determine the impact on a delta adjusted basis.

The policy rule also contains a special regime with respect to cash settled interests in indices or baskets of shares. 
 
2.  Consequences for current positions 
 
The new notification requirement for cash settled instruments may also impact the calculation of overall positions held with regard to shares in listed companies and may require a new notification. A new notification obligation can arise as a result of the recalculation of the current positions that must now also include cash settled instruments.

Prior to the amendment, both direct and indirect holdings and voting interests required notification if certain thresholds were reached or crossed. As a result of the amendment now also cash settled instruments must be taken into consideration and added to the overall calculation. By way of a simplified example, this means that if you held a 4% (in)direct stake in listed company X with an additional 2 % through cash settled instruments prior to 1 January 2012, a notification obligation arises as of 1 January 2012 as a result of the entry into force of the new notification requirement. This is caused by the fact that in this example, the total holding (6%) exceeds a 5% reporting threshold.

Note that a transitional regime applies that effectively extends the filing period one time to four weeks from 31 December 2011. This transitional regime does not apply to changes in holdings as a result of transactions occurred after 31 December 2011. 
 
3.  Yearly update 
 
Although unrelated to the introduction of a notification requirement in respect of cash settled instruments, we take this opportunity to also draw your attention to the yearly update obligation pursuant to Section 5:41 Wft. A periodic notification obligation may arise as a result of a change in the composition of the large position that differs from the previous notification made. If this composition differs at 31 December at 12 midnight vis-à-vis the previous notification an update must be filed within four weeks from 31 December.

Team

Related news

12.03.2019 LU law
Entry into force of the RBE Regulation and update

Articles - The Grand-Ducal Regulation of 15 February 2019 on the registration, payment of administrative fees and access to information recorded in the register of beneficial owners (the “RBE Regulation”) entered into force on 1 March 2019 and depicts the practical aspects of the Law of 13 January 2019 establishing a beneficial owner register (the “RBE Law”). Another document, the LBR Circular 19/01 (the “Circular”) issued by the Luxembourg Business Registers on 25 February 2019  further describes the new register of beneficial owners (the “RBE”) with the aim of helping users. 

Read more

22.02.2019 BE law
Lost your passport - How a hard Brexit will affect UK financial institutions’ access to the Belgian financial market

Articles - FSMA gives local guidance - Belgian legislature prepares contingency measures The UK is due to leave the European Union on 29 March 2019. Unless specific arrangements granting the UK at least a temporary status quo will be adopted before 29 March 2019, the UK financial industry will be considered third-country entities and will therefore be seriously restricted in carrying on their activities in the EEA, including Belgium.

Read more

Our website uses functional cookies for the functioning of the website and analytic cookies that enable us to generate aggregated visitor data. We also use other cookies, such as third party tracking cookies - please indicate whether you agree to the use of these other cookies:

Privacy – en cookieverklaring