The EEAP should solve home Member State determination via LEI matching.
In this series, one of FundApps’ dedicated compliance experts covers a regulatory issue. This week, we have Ben Richards, Compliance Analyst at FundApps, writing about the impact of multi-level derivatives on shareholding disclosure.
In many jurisdictions, financial derivatives must be included in determining how much exposure a holder has in an issuer - somewhat surprising when considering the term “Shareholding Disclosure”. These derivatives don’t always have to give the holder the actual right to own the underlying shares to be included in the calculation - simply financial exposure to an issuer may be reportable. Conceptually, a holder could have over 100% exposure to an issuer, through a mix of direct holdings of a security and cash-settled financial derivatives.