The Transparency Regulations 2015

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations implement in part Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013 (OJ L 294, 6.11.2013 p.13) (“the Transparency Directive Amending Directive”) which amends Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (“the Transparency Directive”) (OJ L 390, 31.12.2004, p.38).

Regulation 2 makes amendments to Part 6 of the Financial Services and Markets Act 2000 (c.8) (“the Act”) concerning transparency rules. “Comparable instruments” within the scope of section 89A(3)(b) of the Act are by virtue of amendments made by the Transparency Directive Amending Directive now within the scope of the Transparency Directive, and fall within section 89A(2) of the Act, so section 89A(3)(b) is omitted. Section 89F of the Act is amended in consequence of the Transparency Directive Amending Directive, which has replaced determination by delegated acts in Article 13 (notifications for the acquisition or disposal of major shareholdings) with a set of conditions which determine whether or not notification requirements apply to a financial instrument.

Regulation 3 transposes Article 21(2) of the Transparency Directive by introducing the requirement in section 89W of the Act for the Financial Conduct Authority (“FCA”) to ensure that there is a central storage system for all information required to be disclosed under the Transparency Directive, EU legislation made under the Transparency Directive and Article 6 of Directive 2003/6/EC of the European Parliament and of the Council of 28 January 2003 on insider dealing and market manipulation (market abuse) (OJ L 96, 12.4.2003, p.16). The central storage system is currently provided by Morningstar, Inc.

Regulation 4 amends the Act to transpose requirements relating to sanctioning powers of the competent authority introduced by the Transparency Directive Amending Directive. New section 89NA of the Act permits the FCA to apply to the court for a suspension of voting rights exercisable in relation to shares in the event of infringements of requirements of the Transparency Directive to notify changes in major shareholdings (transposing Article 28b(2) of the Transparency Directive). It also makes consequential amendments to sections 91 (penalties for breach of transparency rules) and 97 of the Act (appointment by FCA of persons to carry out investigations) to refer to officers of non-corporate bodies who hold roles equivalent to directors. Regulation 4 also inserts a new section 391B of the Act (transposing amendments to Article 29 of the Transparency Directive) concerning publicity for FCA sanctions for infringing the Transparency Directive. The FCA has the discretion to make information anonymous in certain circumstances.

Regulation 5 amends definitions in Part 6 of the Act (official listing) in consequence of Transparency Directive Amending Directive. Regulation 6 amends the meaning of disregarded holdings for the purposes of Part 12 of the Act (control over authorised persons) and other control requirements in the Act consequent on amendments to Article 9 of the Transparency Directive.

Regulation 7 requires the Treasury to review these Regulations every five years.

A full impact assessment of the effect that these Regulations will have on the costs of business and the voluntary sector is available from Her Majesty’s Treasury, 1 Horse Guards Road, London SW1A 2HQ or on www.gov.uk and is published alongside these Regulations on www.legislation.gov.uk.

A transposition note setting out how these Regulations transpose the provisions of the Transparency Directive Amending Directive is published on www.legislation.gov.uk alongside these Regulations.