BaFin will publish the fourth version of the Issuer Guideline shortly. Given the changes in the reporting of voting rights pursuant to the Securities Trading Act (Wertpapierhandelsgesetz – WpHG), BaFin now has to update chapter VIII of the Guideline on “Reporting of voting rights” and chapter XI on the “Information necessary for exercising rights attached to securities”. By the end of May, it performed the public consultation phase for the planned amendments as well as an assessment of the opinions.

Another reason for revising the Guideline was provided by two new pieces of legislation – the Investor Protection and Capital Markets Improvement Act (Anlegerschutz- und Funktionsverbesserungsgesetz – AnsFug) and the Risk Limitation Act (Risikobegrenzungsgesetz – RisikoBegrG) – as well as a judgment of the Federal Court of Justice (Bundesgerichtshof – BGH).

Changes in the Securities Trading Act

Various provisions of the WpHG have changed since the last revision of the Issuer Guideline, or their application was clarified by the administrative practice of BaFin. These include sections 22, 25, 25 a, 30 a and b of the WpHG containing the provisions on attribution of voting rights as well as reporting and publication requirements.

Expanded reporting requirements

The AnsFug, parts of which took effect on 1 February 2012, expanded and supplemented the reporting requirements for financial instruments. Other instruments as defined in the WpHG are now also subject to a notification requirement. As with the other financial instruments of the WpHG, investors have to satisfy an independent reporting requirement. This expansion had become necessary because up to then the important case group of recovery claims under securities loans had not been covered by the WpHG. The new reporting requirement is based on case scenarios in which holders of financial instruments merely providing for cash settlement and therefore not subject to a reporting requirement pursuant to section 25 of the WpHG nonetheless succeeded in pooling share positions with third parties and in purchasing them subsequently.

In addition, the RisikoBegrG of 2008 led to changes in the attribution of voting rights in the case of coordinated conduct (“acting in concert”). If any coordinated conduct occurs (as defined by statute for the first time in the RisikoBegrG), the voting rights of all parties involved are mutually attributed. An article in the BafinJournal of April/10 shows what impact these attribution rules have in the WpHG.

Changed attribution practice at BaFin

Based on a judgment of the BGH of 16 March 2009, BaFin adjusted its attribution practice for securities loans and amended the Issuer Guideline accordingly. Under the previous, now abandoned practice of BaFin, a distinction had been made between simple securities loans and chain securities loans (Ketten-Wertpapierdarlehen). Under the new practice the question of decisive importance when it comes to attribution to the lender is whether the lender under the loan agreement is able to exert an influence over the exercise of voting rights.

As a result of the Accounting Law Modernisation Act (Bilanzrechtsmodernisierungsgesetz – BilMoG) of 25 May 2009, BaFin also revised the statements in the Guideline on attributions to parent companies.

Necessary information for investors

The statements in Section 5a of the WpHG on information that issuers are required to provide so that investors can exercise their rights attached to securities were subjected to an overall revision. The Issuer Guideline now includes more examples from practice illustrating how issuers, for example, have to state the total number of shares or the voting rights in the invitation of shareholders to the general meeting. In the past, BaFin had found that mistakes were often made in this area. In addition, the statements on publication requirements relating to the issue of new shares and the agreement and/or exercise of subscription and other rights were clarified in the new Issuer Guideline.

BaFin also brought the Issuer Guideline in line with the AIFM Implementing Act (AIFM-Umsetzungsgesetz – AIFM-UmsG) by which the Investment Code (Kapitalanlagegesetzbuch – KAGB) was introduced in July 2013. The changes concern the provisions of the Guideline on the reporting requirements of management companies and are chiefly of an editorial nature.

Information on the Issuer Guideline

The revised Issuer Guideline will be available to you shortly on the website of BaFin. On its website, BaFin has published the opinions it received in the consultation phase for the Issuer Guideline. On 19 November 2013, BaFin will be holding a transparency workshop dealing with key points of the opinions.