Disclosure Requirements - Croatia
Disclosure Category 2
Background and legal basis
The basis for the disclosure obligation, which falls on the shareholder, derives from the Capital Market Act.
It is, however, our understanding that the Croatian Financial Services Supervisory Agency (HANFA), Croatian National Bank and other judicial supervisory and regulatory authorities have the right, to the extent permitted by the applicable law, to request disclosure of shareholder information from Erste Bank’s depository Erste & Steiermärkische Bank in Croatia. In such a case, the securities held at CBL’s depository Erste Bank would be disclosed to the requesting authorities.
Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC with regard the encouragement of long-term shareholder engagement (the second shareholder’s rights directive “SRD II”) has been transposed through the Act on Modifications and Amendments to the Companies Act (Official Gazette 40/19) on 20 April 2019 and 1 May 2020. Further provisions will enter into force on 1 January 2021 (“SDR II Law”).
Consent
Customers are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, but not limited to the issuer or its agent) as their attorney-in-fact, under power of attorney, to collect from CBL such information as is required to be disclosed. Customers not willing to give this consent cannot hold such securities and/or financial instruments in their account with CBL.
Obligation to report threshold crossings
Any direct or indirect acquisition or disposal by a natural person or legal entity that causes a holding to reach, exceed or fall below 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of voting rights in issued shares will require such person to send a written notice to HANFA and to the issuer about each such acquisition or disposal without delay and at the latest within two days after the transaction.
Sanctions
The sanctions are determined in the Capital Market Act. The monetary sanctions are as follows:
Any legal entity that does not supply the above mentioned information about crossing the threshold shall be subject to a fine:
- In the amount that is multiple of 1,000, that can not be less than 3% or more than 5% of the total income that a legal entity has gained in the year in which the misdemeanor was committed, determined on the basis of annual financial report of that legal entity for that year; or
- if the amount of the fine imposed pursuant to Bullet 1 above is less than HRK 500,000.00, the legal entity shall be fined in the amount of HRK 500.000,00 to 1.000.000,00; or
- if the legal entity has gained some benefit or prevented loss through such misdemeanor and the amount of such benefit or loss prevented can be determined, the legal entity shall be fined in the double amount of such benefit or loss if such amount exceeds the maximum amount provided in Bullets 1 or 2 above.
The responsible person of the legal entity shall also be fined in the amount of HRK 500.000,00 to 5.000.000,00.
A natural person shall be fined in the amount of HRK 1,000,000.00 to HRK 15,500,000.00.
If the natural person has gained some benefit or prevented loss through such misdemeanor and the amount of such benefit or loss prevented can be determined, the natural person shall be fined in the double amount of such determined benefit or the loss prevented if such amount exceeds the prescribed maximum amount of HRK 15.500.000,00.
Notwithstanding the above mentioned, the regulator is also entitled to impose other non- monetary sanctions and measures.
Shareholder identification as set out in the SRD II Law
The SRD II Law provides for the right for issuers to identify their shareholders.
Issuers can request intermediaries at each level of a custody chain to promptly provide relevant information to facilitate such identification.
In accordance with SDR II Law as amended, an intermediary (in this case, CBL) shall, upon receipt of the shareholder identification disclosure request, transmit similar request to the next intermediaries in the custody chain (that is, CBL customers with holdings in the requested securities). A response to the shareholder identification disclosure request shall be sent by every intermediary in the custody chain directly to the recipient's address defined in the request and without delay. CBL will generate the response as required, with information regarding shareholder's identity, limited to CBL books only.
Customers are hereby informed and acknowledge that, according to Article 297 E of the Companies Act (Official Gazette 40/19) of the SRD II Law, the intermediary that discloses information concerning the identity of shareholders for the purposes of the SRD II rules (including CBL) shall not be considered to be in breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision.