The National Assembly has adopted amendments to the Public Offering of Securities Act, the goal of which is to provide for better protection of investors. The amendments implement Directive 2010/73/EU amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market.
The most important amendments are as detailed below.
- Bondholder protection:
- Trustee banks are now approved by the general meeting of bondholders (GMB) rather than unilaterally selected by the issuer.
- The GMB record date is set to five days prior to the meeting date and there is a precise timeframe for the submission of the regular analyses of the bond issuers' financial status by the trustee banks.
- Trustee banks are to ensure the timeliness of the payments related to bond issues. Furthermore, trustee banks, instead of issuers, are to assign collateral revaluations.
- Tender offer:
- There are changes to the threshold for mandatory tender offers, which has now become one-third if no shareholder has direct or indirect (through related persons) ownership of more than 50% of the votes, therefore replacing the current threshold of 50%.
- An extended timeframe has been introduced for the Financial Supervision Commission to review tender offers - 20 days instead of 14 days.
- There are changes in the way of determining tender offer prices so as to ensure fair compensation for the minority shareholders.
- The squeeze-out period has been reduced from one month to seven business days.
- A public company could in the future cease to be public if a unanimous decision for this has been taken at a general meeting of the shareholders (GMS) attended by all shareholders of the company.
- Introduction of employee-share-ownership-plans related capital increase.
- There will be a wider scope of transactions to be approved by the GMS or the management bodies.
- Amendments have been made with regards to the procedures for publishing the notice informing of public offerings, i.e. the notice is now to be entered in the Commercial Register and published in at least two national daily newspapers and the websites of the issuer and lead manager(s), replacing the former requirement to publish the notice in the State Gazette and in one national daily newspaper.
- Important amendments with respect to government debt have also been made; The Minister of Finance is now the competent authority with respect to short selling of government securities and uncovered positions in sovereign credit default swaps.
- Licensed central depositories from EU member countries may now be subdepositories of government securities.
Impact on investors: The amendments to the Public Offering of Securities Act have been adopted with the aim of providing for better protection of investors as well as improving the general framework for the function of the capital market.