BlackRock: BaFin imposes fine of EUR 3.25m
The German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) has imposed a fine of EUR 3.25m on BlackRock Investment Management (UK) Ltd. This constitutes the largest fine that BaFin has ever imposed. BlackRock has announced that it will accept the fine.
BlackRock group companies had previously disclosed their holdings of voting rights and financial instruments incorrectly or late, in contravention of the Securities Trading Act (Wertpapierhandelsgesetz – WpHG) (sections 21, 22 and 25 of the WpHG). The incorrect or late disclosures were attributable to a mistaken interpretation of German disclosure rules and related to a number of German large cap issuers.
In this matter, BlackRock had approached BaFin in July 2014, had contributed to clarifying the issue and had corrected and caught up on the disclosures concerned at the end of September 2014. Furthermore, BlackRock has introduced internal measures intended to prevent similar infractions in the future.
Regarding the disclosure rules of the WpHG:
Investors in listed companies are legally required to notify BaFin and the relevant issuers of the percentage of the voting rights that they hold once their holdings reach, exceed or fall below the thresholds of 3, 5, 10, 15, 20, 15, 30, 50 or 75 per cent by way of acquisition, disposal or in any other way. In addition to voting rights, holdings of certain types of financial instruments through which shares can be acquired must also be disclosed. Data regarding the shareholder structure of a listed company and information regarding any changes in material holdings serve to promote transparency. Such information is a helpful guide for investment decisions. Consequently, disclosures must be made without undue delay, but in any case within four trading days at a maximum. In turn, the listed company must publish the disclosure without undue delay, but at the latest within three trading days. BaFin provides investors with the published disclosures on its website.