General information and amendment of administrative practice following transposition of TDIII

Under section 49 (1) sentence 1 no. 2 of the WpHG, an issuer must disclose the distribution and payment of dividends, an announcement about the issuance of new shares, the agreement or the exercise of exchange, subscription, redemption and subscription rights, and any resolution on these rights. The requirements of the TRL-ÄndRL-UmsG and the 1. FiMaNoG resulted in changes regarding the publication obligations under section 49 (1) sentence 1 no. 2 of the WpHG. There were no changes with regard to the link between the publication obligation and, for example, the distribution/payment of dividends and the requirements governing subscription and retirement rights. However, there have been changes with regard to the timing of publications. For example, since the 1. FiMaNoG came into force, the issuer must announce the forthcoming issuance of shares, not the already effected issuance. In addition, the publication requirement resulting from the TRLÄndRL-UmsG is now linked to the “resolution” about the rights referred to in section 49 (1) sentence 1 no. 2 of the WpHG. The addition to the wording by the term “resolution” serves, among other things, to clarify the publication obligations for “agreements”, for example with regard to pre-emptive rights, which have been controversial in the past. The exclusion of subscription rights in the course of capital increases or the sale of the company’s treasury shares therefore continues to be subject to the publication obligation.

Additionally, BaFin used the occasion of the changes in the wording and the legislative material to amend some of its administrative practice on application of the publication obligations. The most important changes:

1. First, publication obligations are only triggered if the rights of the shareholders are actually affected. The consequence of this is that authorisations adopted by general meeting resolutions no longer trigger a general publication obligation, but only the actual exercise of the authorisation by the governing bodies (management board and, possibly, the supervisory board). This applies in particular to the publication obligations in the context of creating authorised capital and redemption of shares.
2. Second, the aim is to avoid duplicated publications with the same content. This also corresponds to the legal principle set out in section 49 (1) sentence 2 of the WpHG, under which a separate publication under section 49 (1) sentence 1 no. 2 of the WpHG superfluous if a corresponding publication in the Federal Gazette is already stipulated. For example, the publication of the subscription offer in the Federal Gazette pursuant to section 186 (5) sentence 2 of the AktG is deemed to be a publication that corresponds to the prescribed publication of the announcement of the forthcoming issuance of new shares and, simultaneously, of the resolution on pre-emptive rights under section 49 of the WpHG if the publication of the subscription offer is made without undue delay within the meaning of section 49 (1) sentence 1 no. 2 of the WpHG following the resolution (by the general meeting or the management board if authorised capital is utilised) and if it contains all the notifiable circumstances under section 49 (1) sentence 1 no. 2 of the WpHG. Under the principle set out above, under which the shareholders must be informed if their rights are actually affected, it is no longer only the exclusion of pre-emptive rights, but actually their grant, which is subject to the notification obligation. However, if the conditions for the corresponding publication in the form of the subscription offer apply, a separate publication under section 49 (1) sentence 1 no. 2 is superfluous in cases in which pre-emptive rights are granted. A publication under section 49 (1) sentence 1 no. 2 of the WpHG with regard to the announcement of the forthcoming issuance of new shares and the exclusion of shareholders’ pre-emptive rights is only required in cases in which the shareholders have no pre-emptive rights and there is thus no subscription offer within the meaning of a corresponding publication.

Notifiable standard resolutions

Dividend payments

Under section 49 (1) sentence 1 half-sentence 2 of the WpHG, the issuer must publish the distribution and payment of dividends without undue delay in the Federal Gazette. The concept of a “dividend” only includes “genuine” dividends within the meaning of the AktG, i.e. the amount or the non-cash asset distributed to the shareholders out of the net retained profits whose appropriation is determined by a resolution under section 174 of the AktG, but not other payments whose amounts are guided by this. For example, a compensation payment or the resolution adopting it under section 304 of the AktG therefore does not constitute a dividend within the meaning of section 49 (1) sentence 1 no. 2 of the WpHG.

Resolution on pre-emptive rights and announcement of the issuance of new shares in the context of a regular capital increase

As since the 1. FiMaNoG an earlier publication in connection with the issuance of new shares is required, the publication obligation in the case of a regular capital increase under section 49 (1) sentence 1 no. 2 of the WpHG will, in future, be linked to the respective resolution of the general meeting. The resolution becomes effective immediately after its adoption. Linking the publication obligation to the registration of the capital increase resolution in the commercial register is not rational because publication is now required as soon as the forthcoming issuance of new shares has been announced and, in practice, the capital increase resolution is registered in the commercial register together with the implementation of the capital increase (section 188 (4) of the AktG). The shares have already been issued at this point, however, with the result that publication of the announcement of the forthcoming issuance would no longer be possible.

A distinction must be made as regards the publication requirement, depending on whether shareholders are granted pre-emptive rights or pre-emptive rights have been excluded. If a subscription offer to the shareholders under section 186 (5) sentence 2, subsection (2) sentence 1 in conjunction with section 25 of the AktG is published in the Federal Gazette without undue delay following the resolution of the general meeting, this is deemed to be an appropriate publication for both the announcement of the forthcoming issuance of new shares and for the pre-emptive rights arrangements. In addition, if pre-emptive rights have been excluded, a publication under section 49 (1) sentence 1 no. 2 of the WpHG must be made for the announcement of the new shares and for the exclusion of pre-emptive rights without undue delay following the resolution of the general meeting.

Resolution on pre-emptive rights and announcement of the issuance of new shares in the case of contingent capital

In the case of a contingent capital increase (Bedingtes Kapital), the publication obligation of section 49 (1) sentence 1 no. 2 of the WpHG due to the issuance of new shares is linked to the resolution of the general meeting, as in the case of a regular capital increase, because the effectiveness of the resolution to issue new shares does not depend on its entry in the commercial register, even if it cannot be implemented prior to entry in the commercial register under section 197 of the AktG. The content of the resolution must be published in the Federal Gazette under section 49 (1) sentence 1 no. 2 of the WpHG without undue delay after its resolution.

If contingent capital has been resolved, there is an additional publication obligation due to the simultaneously resolved purpose of the contingent capital, i.e. specifically the termination about who is to receive the subscription rights to the new shares, as this is a resolution about pre-emptive rights within the meaning of section 49 (1) sentence 1 no. 2 of the WpHG.

In such cases, it is also conceivable for the general meeting to already resolve the specific arrangements for pre-emptive rights. Because the resolution is already legally valid when the general meeting adopts the resolution, the publication obligation under section 49 (1) sentence 1 no. 2 of the WpHG is also linked to the resolution adopted by the general meeting with regard to the arrangements for pre-emptive rights in order to avoid separate publications in quick succession in practice.

The resolution on the contingent capital increase is often linked to the shareholders’ resolution authorising the management board to issue a convertible bond. This resolution only triggers a publication obligation under section 49 of the WpHG if the general meeting resolves upon an arrangement for pre-emptive rights to subscribe for the convertible bond (section 221 (4) of the AktG); on the other hand, if the general meeting authorises the management board to decide the arrangements for pre-emptive rights to subscribe for the convertible bond, or even to exclude those rights, the publication under section 49 (1) sentence 1 no. 2 of the WpHG due to the resolution on pre-emptive rights must only be made when this authorisation is exercised by the management. In turn, the applicable principle here is that, if the shareholders are granted a pre-emptive right to subscribe for the convertible bonds, publication of the subscription offer (under section 221 (4) sentence 2 in conjunction with section 186 (5) sentence 2 of the AktG) is deemed to be a publication by other means within the meaning of section 49 (1) sentence 2 of the WpHG.

Resolution on pre-emptive rights and announcement of the issuance of new shares in the case of authorised capital

In the case of authorised capital, the publication obligation due to the announcement of the forthcoming issuance of new shares arises when the issue of new shares is actually about to happen. The decisive linking factor is therefore the resolution by the management board (following the necessary approval of the supervisory board) to exercise the authorisation to issue new shares under the authorised capital.

Here, too, the principle is that if the management board’s resolution is followed without undue delay by a subscription offer to the shareholders, the respective publication in the Federal Gazette constitutes a corresponding publication by other means within the meaning of section 49 (1) sentence 2 of the WpHG, and there is thus no need for a separate publication due to the announcement of the forthcoming issuance of new shares and the granting of pre-emptive rights under section 49 (1) sentence 1 no. 2 of the WpHG.

A publication under section 49 of the WpHG due to the announcement of the forthcoming issuance of new shares and of the exclusion of pre-emptive rights is only required in cases where the subscription offer is not made immediately after the management board’s resolution.

Resolutions under section 71 (1) no. 8 of the AktG

Resolutions under section 71 (1) no. 8 sentence 6 of the AktG relating to the acquisition of treasury shares that authorise the management board to redeem the shares do not, in the first instance, trigger any publication obligation under section 49 (1) sentence 1 no. 2 of the WpHG. This is only subject to a publication obligation under section 49 (1) sentence 1 no. 2 of the WpHG as a resolution on redemption rights when the management board exercises the authorisation to redeem shares.

If the management board is authorised by a resolution of the general meeting to sell own (treasury) shares without observing the principle of equal treatment (section 53a of the AktG), this is treated in the same way as the exclusion of pre-emptive rights under section 71 (1) no. 8 sentence 5 of the AktG in conjunction with sections 186 (3) and (4) and 193 (2) no. 4 of the AktG. In this case, the publication obligation under section 49 (1) sentence 1 no. 2 of the WpHG arises when the general meeting adopts a resolution on the permitted utilisation purposes, which has the same effect as the exclusion of pre-emptive rights.

Publication must be made without undue delay

A publication is made without undue delay within the meaning of section 49 (1) sentence 1 no. 2 of the WpHG only if it is made without culpable delay. As a rule, BaFin will regard a publication as having been made without undue delay if a subscription offer (serving as a corresponding publication by other means) is published within 14 days after the resolution of the general meeting (in the case of a regular capital increase) or the management board (in the case of authorised capital or the retirement of treasury shares), provided that the management board drives forward the implementation of the capital increase without further delay; in individual cases, however, a separate publication under section 49 of the WpHG may be advisable if publication of the subscription offer in the Federal Gazette is delayed. Specific questions should be clarified with BaFin in good time.