The Transparency Directive, Transparency Obligations Directive or Directive 2004/109/EC is an EU Directive issued in 2004, revising an earlier Directive 2001/34/EC. The Transparency Directive was amended in 2013 by the Transparency Directive Amending Directive (Directive 2013/50/EU).
The Transparency Directive improves the harmonisation of information duties of issuers, whose securities are listed at a regulated market at a stock exchange within the European Union, and further market participants. The aims of these amendments are to establish minimum requirements regarding the financial information distribution all over the European Union and an increase in transparency at the capital markets and in investor protection to meet information deficits in a developing financial market environment.
The term Transparency Obligations Directive is used in the UK Companies Act 2006, which implemented the Directive within United Kingdom company law.
History
The Transparency Directive of 2004
The process, which resulted in the 2004 version of the EU Transparency Directive, passed several years, consultations and revisions. The first step towards the EU Transparency Directive of 2004 took place in July 2001 when the commission of the European Union announced the first consultation regarding the transparency on publicly traded companies. This first consultation period lasted from 17 July 2001 until 30 September 2001. During that time interested parties were able to contribute comments on the proposals, which the commission drafted in its own consultation paper, regarding the new regime on disclosure requirements. Interested parties could be the issuers themselves, national agencies and associations, state authorities and European authorities, such as CESR. The consultation paper of the commission suggested a division of disclosure duties, in periodic and ongoing obligations, for example for financial reports (periodical) and ad hoc notifications (ongoing), and a focus on the publications of those information through a medium on a Europe-wide basis as well as the control of these duties by the national supervisory authorities. Until the end of the consultation period the commission received 90 contributions from market participants all over Europe, whereas most of the answers came from British and German interest groups. Mostly these answers complied with the suggestions, which were made up by the commission.
However, there have also been some amendments: Reducing the lowest threshold regarding notifications of major voting rights Introducing International Accounting Standards into financial reports Publication of information via newspaper and internet Responsibility of state authorities for supervision (in cooperation with stock exchanges)
After the first consultation the Commission revised its consultation paper to present it to the public another time. In May 2002 the Commission launched a second and final consultation period, which lasted from 8 May 2002 until 5 July 2002. The Commission specified the information requirements regarding issuers, listed in a regulated market at a stock exchange, especially in terms of financial reporting, voting rights, directors' dealing, stock options, employee shares schemes and equal treatment of shareholders.
In detail, those suggestions were: Financial reporting requirements based on the annual turnover Equal treatment of shareholders by admitting proxy voting rights and electronic voting Lower initial threshold for notifications of voting rights at 5% Introducing further thresholds at 15% and 30% Time limit for filing such notification: 5 calendar days Publication of such notifications on the issuer's homepage, in a newspaper and further information/news providers
These suggestions were basically confirmed by the interested parties.
On 26 May 2003 the Commission proposed its draft for the Directive to the European Parliament and to the Council of the European Union. About one year later, on 30 March 2004, the European Parliament approved the Directive, whereby the unofficial version of the Directive was published on 11 May 2004. This unofficial version covered all of the topics discussed in the former consultation process, such as periodical financial reporting, transparency in shareholder structure and publication of information.