ESMA Proposes Standards Under Revised Transparency Directive

The European Securities and Markets Authority (ESMA) has proposed standards under the revised Transparency Directive, particularly around shareholdings notification requirements. ESMA also sets out the proposed content of an indicative list of financial instruments which should be subject to the notification requirements laid down in the Directive, and outlines the processes for updating that list. ESMA considered whether the 5 percent notification threshold should only be used to disclose Article 9 and 10 holdings or if this should also include holdings of Article 13 financial instruments. According to the first alternative, two separate buckets of up to 5 percent each would exist; one consisting of Article 9 and 10 shares and another with Article 13 financial instruments. Thus, a credit institution or investment firm could hold as a market maker or in its trading book a combined position in a share of up to the double of the actual respective threshold. According to the second alternative, all Article 9, 10 and 13 holdings should be aggregated in a single bucket up to the 5 percent threshold.