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Issuer Limits 2.0

Posted by Ben Richards on 15 May 2019



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As described in a previous blog, France (Article L. 233-7), Belgium (Law  02-05-2007) and other countries around the world have legal frameworks that allow issuers to impose additional and often stricter disclosure thresholds than those set out in the statutory regimes. 

For example in France, L'Oréal requires share owners to disclose their share ownership from 1% and every 1% change up and down compared to the statutory regime in France where disclosure requirements begin at 5%.

How does FundApps manage this for our customers?

The FundApps Shareholding Disclosure Service sources these issuer specific thresholds and monitors customer positions against such thresholds, alerting when a disclosure is required. With over 50 customers using the platform each day, the power of the FundApps community informing us of new and changed limits has allowed us to grow our data set, which is then audited every 6 months.

 

Recently however, FundApps took on a project to proactively check the top 500 companies (by MarketCap) listed on Euronext Paris and Brussels to see if any of these issuers had bespoke limits, which FundApps did not already have, and there were.

 

With the project now completed FundApps now has bespoke issuer limit data for over 400 companies.

What FundApps Has learnt

Not all issuers impose bespoke thresholds. From the existing data set FundApps had, there were almost 90 new companies added. What this showed was that not all companies do impose additional thresholds for shareholders to monitor against.

 

Severity of fines can vary. Investigating the fines for not complying, these too can vary - from being stripped of all your voting rights, to be stripped of a fraction and for a specific period rather than for all time.

 

Variation in Reporting Deadlines.  Whilst FundApps were aware of reporting deadlines differing per issuer, the lack of consistency did continue to surprise us. For example reaching an issuer limit in Kering, you have 15 days to disclosure, whereas crossing a limit in SES Imagotag, you have 5 trading days to disclose.

 

See how FundApps can help you reduce the risk of missing an issuer limit disclosure:

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