Disclosure Requirements - Slovak Republic
Disclosure Category 2
Background and legal basis
The basis for the disclosure obligation derives from the Act on Securities and Investment Services (n° 566/2001) and from the Stock Exchange Act (no 429/2002), as amended.
The Act on Securities and Investment Services of 2001 sets up a disclosure obligation at the level of the local CSD, upon request of the issuer.
Furthermore, the Stock Exchange Act of 2002 provides for an obligation to report threshold crossings, which falls on the shareholder (in this case, CBL, in whose name the shares are registered in the Slovak Republic).
Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (the second shareholder’s rights directive “SRD II”) has been transposed into Act on Securities and Investment Services No. 566/2001 and into Commercial Code No. 513/1991 in May 2019 (SDR II Law).
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
When a shareholder acquires or disposes of shares of an issuer whose shares are admitted to trading on a regulated market and to which voting rights are attached, the shareholder shall notify the issuer of the proportion of voting rights held by the shareholder as a result of the acquisition or disposal where that proportion reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%, and within four business days after the date that the voting rights were acquired.
The information that the shareholder provides to the issuer must be filed with the National Bank of Slovakia (NBS) at the same time.
Failure to comply with the provisions of the Stock Exchange Act of 2002 or other generally binding legal regulations may entitle the NBS, according to the nature, severity, degree of culpability, manner, duration of the unlawful action and its consequences, to:
- Impose measures for removing and remedying the shortcomings found;
- Cancel a stock exchange transaction;
- Order a stock exchange or an issuer to publish a correction of incomplete, incorrect or untrue information that the stock exchange or issuer published on the basis of a statutory duty;
- Order a stock exchange to end unlicensed activity;
- Impose a fine of up to EUR 10 million or up to 5% of total annual turnover according to the last available annual accounts approved by the management body, or up to twice the amount of the profits gained or losses avoided because of the breach, where those can be determined, whichever is higher; where the legal entity is a parent undertaking or a subsidiary of a parent undertaking which has to prepare consolidated financial accounts, the relevant total turnover shall be the total annual turnover or the corresponding type of income according to the last available consolidated annual accounts approved by the management body of the ultimate parent undertaking;
- Limit its activity or suspend its licence for a maximum of one year;
- Withdraw a licence;
- Issue a public statement indicating the natural person or the legal entity responsible and the nature of the breach;
- Impose a fine in the case of a natural person, of up to EUR 2 million or up to twice the amount of the profits gained or losses avoided because of the breach, where those can be determined, whichever is higher.
The NBS may also suspend the rights of voting in respect of a person whose operation concerning a stock exchange is to the detriment of the due and prudent business conduct of the stock exchange.
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.
Local law introduces a threshold of 0.5% for the Shareholder Identification.
In accordance with the SDR II Law as amended, an intermediary (in this case, CBL) shall, upon receipt of the shareholder identification request, transmit 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.