Disclosure of changes in major holdings
Abstract: With the adoption of MiFID II, a new, less regulated ‘level’ of capital mar-ket, the SME Growth market, is now available for the member states of the European Union. Available for SME Growth markets, there are several regu-latory alleviations for issuers of shares regarding e.g. the supply of infor-mation to the market, compared to issuers on regulated and MTF markets. With this in mind, this thesis aims at, with economic research on markets as a basis of thought, analysing whether there are reasons for adopting more stringent rules on the MTF segment, specifically analysing the rules on dis-closure of major holdings. Capital markets provide a venue for companies to offer their securi-ties and for other market participants to trade on them. Economic research holds that markets can be more or less effective, meaning that prices repre-sent more or less of the relevant information about them. Further, economic research holds that several issues can arise from information asymmetries between buyers and sellers, including the adverse selection problem and the moral hazards problem. On capital markets, there are several regulations that aim at improving their functioningby different means. In this thesis, some of the regulations that direct market participants’ behaviour are presented and categorised as disclosure rules and prohibitions on market abuse. The disclosure rules in-clude prospectus disclosure, periodic economic information disclosure, dis-closure of insider information and disclosure of directors’ dealings. The pro-hibitions include the prohibition of insider trading and market manipulation. The rules on disclosure of major holdings is another part of the transparency rules. The major holdings disclosure rules are a part of Union law through the Transparency Directive. The rules entail obligations for shareholders to notify the listed companies when their holdings in them exceeds, reaches or falls below certain thresholds. These rules are only legally applicable on regulated markets but are nonetheless applied by virtue of civil law agree-ments on both Spotlight and First North Premier, which are two MTF mar-kets. It is submitted, that since there is now a third market available that facilitates the needs for smaller companies looking for less regulations to comply with, there are real benefits to be gained by adopting major holdings rules on the MTF segment. The benefits include raising the publics’ concep-tion about MTF markets, thus making them more available for wider groups of investors, applying the same level of stringency as today is applied on regulated markets, supplying the need for a smaller step between MTF mar-kets and regulated markets and to provide information about the ownership structure changes that occur on MTF markets today.
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