In posts no. 58 and 64 I wrote about calls for expansion of the scope of the Dutch ownership disclosure rules, in response to the use of equity derivatives to influence voting behavior and to silently build up large stakes in listed companies. Now, the Dutch Ministry of Finance has published a proposal to change the rules (specifically, section 5:45 Wft) such that holders of equity derivatives will be deemed to hold the underlying shares and thus become subject to disclosure obligations:
I will be scrutinizing the proposal as part of a forthcoming article in Dutch legal periodical Ondernemingrecht, and share some initial thoughts on this blog shortly. For now, suffice it note that the proposed approach is basically that of the UK's Financial Services Authority, which recently amended the UK rules such that not only holders of 'qualifying financial instruments' are subject to disclosure obligations, but also holders of financial instruments that
(ii) have similar economic effects to (but which are not) qualifying financial instruments within DTR 5.3.2R.
The Ministry of Finance also envisages that the Dutch takeover rules will be amended such that transactions by the bidder in equity derivatives will have to be disclosed, as the UK Takeover Code has already required for quite some time.
Finally, the Ministry of Finance asks market participants whether they believe there is a case for requiring investors who disclose major share positions (5%, soon 3%) to simultaneously disclose their short positions. This would clarify what the investor's net economic position is, and expose potential for empty voting - more on this soon.
The proposal can be found here.