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Consultation on the modernisation of the Directive 2004/109/EC

Letter to European Commission, Directorate-General Internal Market and Services

1 September 2010

Thank you for the opportunity to participate in the consultation on the modernisation of the Directive 2004/109/EC (transparency requirements for listed companies).

Norges Bank Investment Management (NBIM) holds assets of approximately €380 billion, of which approximately €145 billion is invested in European Commission regulated markets. NBIM is committed to make active use of its ownership rights in order to promote legitimate, efficient and well functioning markets. We consider the Transparency Directive to be a key pillar of European market effectiveness and welcome the Commission’s modernising initiative. The attractiveness of regulated capital markets for smaller listed companies

NBIM believes the deadlines for small listed companies to publish financial reports should not be segregated or extended. We see no transparency gain to establishing a differentiated regime for smaller companies. Furthermore, we believe the obligation to disclose quarterly financial information should be continued. We emphasise the effect that such key transparency measures have on the quality and credibility of the reporting of small companies and the orderly markets for those stocks. Benefits from transparency requirements are likely to be particularly high for smaller listed companies. As such, we, as owner of small companies, are willing to accept the indirect cost associated with fulfilling such reporting obligations.

Harmonisation of disclosure rules

NBIM supports efforts to improve the transparency of ownership and voting rights. We anticipate, and accept, that costs will rise substantially for investors as a consequence of reform. We regard the introduction of a minimum disclosure threshold of 3% from the current 5% to be secondary in importance to the need for clear and harmonised disclosure rules.   It should be required that all mandatory disclosures, irrespective of  threshold, be established on the same scopes, definitions, calculation methods, disclosure content, implementation methods deadlines and sanctions.  If a lower threshold of 3% is introduced by the Commission, we suggest the subsequent upper thresholds should remain unaltered.

NBIM supports the principle of extending the Transparency Directive disclosure requirements to include cash settled options and all other such derivatives acquired if done so with the opportunity or a view to acquire control of voting rights.  We note the important case studies detailed on page 72 of the Commission Staff Working Document as evidence for such a change to the Directive. We further support the principle of extending the Directive to include notification of stock lending positions.  We support the aggregation of holdings for disclosure purposes but this should still permit the separate breakdown of holding between voting equity and derivatives.

The application of the Directive across national markets

NBIM accepts the challenges of applying the Transparency Directive across many national markets. But we restate our belief that European market legitimacy and effectiveness has been promoted by the introduction of the original Directive and we support all efforts to constructively modernise transparency requirements in the light of experience and market innovation.

We hope the views of NBIM set out here are helpful to the Commission’s work.


Yours sincerely, 


Anne Kvam
Global Head of Ownership Strategies

Jan Thomsen
Chief Compliance Officer