Voting rights

3,476 changes in voting interests were reported in 2017 (see Figure 14"Voting rights notifications"; previous year: 3,327¹). Of this total, 2,214 submissions were attributable to group notifications, in which the ultimate parent undertaking reports changes in or levels of equity interests. 455 group notifications were provided voluntarily, i.e. they related to matters for which only subsidiaries had a reporting obligation, but the ultimate parent (voluntarily) submits a group notification that exempts the subsidiaries from this obligation. The majority of notifications (2,674) related to changes in voting rights triggered by the number of voting rights reaching or crossing certain thresholds (sections 33 and 34 of the German Securities Trading Act (Wertpapierhandelsgesetz)). 204 notifications (also) included changes resulting from holdings of financial instruments reaching or crossing thresholds (section 38 of the Securities Trading Act) and 219 notifications were (also) due to the aggregated voting rights and holdings of financial instruments reaching or crossing thresholds (section 39 of the Securities Trading Act). 436 notifications concerned changes that were not related to thresholds.

Figure 14 Voting rights notifications

Voting rights notifications

BaFin

In 2017, 602 companies were admitted to trading on the regulated market. This means that the figure was again slightly down on the previous year (614). By contrast, the number of notifications these companies published on changes in their voting share capital increased slightly to 313 (previous year: 265). 4 real estate investment trusts (REITs) were subject to the reporting requirement at the end of 2017.

Two years since the Transparency Directive was amended

In 2017, the number of voting rights notifications was similar to the previous year, at 3,476. Around 2,214, and therefore more than half of all notifications, were group notifications. Changes to the reporting system had already caused a considerable decline in the number of voting rights notifications in 2016, their number declining by around two thirds, from 9,686 in 2015 to 3,327 in 2016.² This meant that a key objective of the above-mentioned amendments – the sustained simplification of the reporting system by combining report data into a single notification – was achieved.

As a result of the German Act Implementing the Transparency Directive Amending Directive (Umsetzungsgesetz zur europäischen Transparenzrichtlinie-Änderungsrichtlinie), comprehensive changes to the voting rights reporting system entered into force at the end of 2015. In addition to implementing the mandatory requirements of the revised Transparency Directive, additional amendments introduced by German legislators were aimed at simplifying the reporting system and bringing it closer in line with European standards. This is intended to benefit the transparency of voting rights notifications. For example, a mandatory report form has been introduced, which covers all three notification criteria the issuer has to disclose. In addition, the point at which a threshold is reached or crossed has been brought forward from the time of actual transfer to the time the contractual obligation arises, if the transaction concerned is unconditional and has to be settled without delay. In addition, since the end of 2015, group notifications have been sufficient, i.e. only the ultimate parent undertaking submits a voting rights notification in the case of parent-subsidiary relationships.

Earlier crossing point

The fact that the threshold crossing point has been moved forward has also simplified the process in practice, especially in cases where both the buyer and the seller have to submit a notification. Previously, it was common for both parties to provide different information about the time the threshold was reached or crossed, and this normally entailed subsequent corrections.

The concerns voiced during the legislative process about plans to move this point forward have not materialised. For example, there has only been a negligible number of cases where there have been delays in the completion of the contractual transaction, thus necessitating a correction to the original notification.

Notifications of corporate actions have also become more transparent: they are now generally only submitted by new and existing shareholders if these actions reach or cross a threshold. Notifications by consortium banks are a special case: since BaFin revised its administrative practice at the end of 2015, they can apply the exemption for clearing settlement transactions (section 23 of the Securities Trading Act, old version, section 36 of the Securities Trading Act, new version).

Electronic reporting system planned for 2018

The introduction of another expedient for voting rights notifications, an electronic reporting system, is planned for 2018.

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