CFCL Investment regulation

Regulatory structure

Please refer to the Market infrastructure - Greece for the complete information about the Regulatory structure.

Holding restrictions – CSD Market - Greece

Holding Restrictions

There are no specific ownership restrictions for foreign residents; that differ from those for Greek investors. An inter-ministerial committee approval is required before raising holdings above 20% in strategically sensitive national companies.

The Amended Significant Shareholder Law 3414/2005 (replacing Law 3310/2005) on transparency and prevention of infringement on the procedure of contracts with the Greek public sector regulates and imposes some holding restrictions in relation to Public Sector Contracts Companies (PSCCs)1 and Mass Media Companies (MMCs).

A significant shareholder of a PSCC or an MMC is the natural or legal person, who, directly or indirectly:

Is currently an owner of shares or a holder of voting rights representing at least 1% of the share capital or of the total voting rights (respectively) of such a company; or
has ever been an owner of shares that represented at least 1% of the share capital or a holder of voting rights that represented at least 1% of the total share capital or the total voting rights at the general meeting that resulted in the election or revocation of the last Board of Directors of such a company.

The above is under the additional precondition that, during the period between the commencement of the legal procedure that may result in a PSC and the completion of the control on incompatibilities made by the Greek National Council for Radio and Television (NCRTV), such natural or legal person:

Is or was at any time the owner of a number of shares ranking such shareholder among the 10 major shareholders of such a company; or
Holds or has at any time held voting rights at the general meeting of shareholders of such a company ranking such a shareholder among the 10 major shareholders; or
Has or at any time had a right, either by law or by such a company’s articles of association, to appoint or revoke a member of its board of directors; or
Has at any time entered, directly or indirectly, into contracts with such a company that resulted in financial gains for that company for the previous fiscal year at least equal to 10% of such a company’s gross revenues for the same fiscal year.

The main underlying impact for CFCL clients is on the maximum percentage of the Radio and Television MMC’s share capital (excluding Paying Television MMCs) that may be held by foreign (non- EU) shareholders or by a single shareholder. The total share capital that may be held by foreign (non-EU) shareholders in a Radio and Television MMC is 25%; the maximum that a single shareholder may hold in such a company is 25%.

Note: It is the responsibility of the Clearstream Fund Centre client to ensure compliance with local holding restriction requirements. If a requirement is not met, it is the client that will be liable for any related penalty. Clients may wish to seek independent legal advice on the interpretation of Greek holding restrictions in respect of the amended Significant Shareholder Law considering the complexity of this new law

A Public Sector Contracts Company (PSCC) is a natural person or a legal entity entering into a PSC or participating in a legal procedure, according to relevant legislation, that results in a PSC (where PSC refers to a contract between the private sector and the State for the provision of services or goods or for the execution of a contract with a price above EUR 1 million).
A Mass Media Company (MMC) is a company engaged, exclusively or not, in any of the following activities:

Publication of newspapers or magazines, defined as such by the relevant Greek legislation, or editions containing political or economical material, printed, published or distributed in any form, including electronically;
Establishment and operation or management of television station(s), transmission of television signals, in any form or manner, for example free, cable, paying, satellite, digital or other, according to relevant legislation in force;
Establishment and operation or management of radio station(s), transmission of radio signals in any form or manner, according to relevant legislation in force;
Provision via the internet of audiovisual services of informative nature

Disclosure requirements

Introductory information and categories

This section provides general information about the disclosure requirements for fund securities holdings with which Clearstream Fund Centre must, according to the information available at the time of the present publication, comply with each of the domestic markets and fund markets covered by the Disclosure Requirements.

Fund securities that are held remotely are usually not disclosed by CFCL. A disclosure request received by CFCL regarding such a holding will be forwarded to the relevant client without assessing its validity and the CFCL Client shall handle the request on a voluntary basis.

Disclosure Requirements are only available for those countries where CFCL has a link to the respective domestic market or direct access to local domiciled funds that are held in Clearstream’s name on the register.

For fund securities holdings where CFCL has no such link or direct access to the register, clients must be aware that local laws might provide for mandatory disclosure. A disclosure request in this regard will be forwarded to clients without assessing its validity. Clients commit not to unreasonably withhold their consent to such a request and agree to indemnify CFCL for damages resulting directly from non-compliance with mandatory local disclosure requirements. In most cases, the obligation to disclose is based on the domestic equivalent of a Companies Act, relevant investment funds act or anti-money laundering act and covers all security types.

In some instances, the obligation to disclose is based on stock exchange laws or regulations and only applies to listed domestic and foreign securities.

The Disclosure Requirements do not constitute legal advice and the Clients should seek independent professional advice in relation to fund securities deposited with CFCL, especially as, for those jurisdictions in which no disclosure obligation falls on CFCL, there may be separate disclosure requirements that apply directly to clients of CFCL, shareholders and beneficial owners.

Please note that CFCL is not always given comprehensive information or advised of changes affecting local disclosure requirements.

It remains the sole responsibility of the Client to ensure compliance with local disclosure requirements. If a requirement is not met, it is the Client who will be liable to any related penalty. Clients are therefore advised to seek independent legal advice on the existence and interpretation of local disclosure requirements.

In the case of a discrepancy between the general information contained in this document and the information provided by CFCL for a specific market, as applicable (irrespective of whether this information has been obtained from an agent of Clearstream Fund Centre, or, as the case may be, a foreign regulator of a branch of CFCL), the information provided by CFCL for the specific market as applicable, shall prevail.

N.B.: In all countries, if it is suspected that a disclosure obligation has been breached (for example, that a threshold of holdings under custody has been crossed without being reported), the regulators and the authorities may have the power to investigate. Moreover, in all countries, disclosure obligations might be triggered by enforceable judgements of the competent jurisdiction of the country in question.

Disclosure categories

Clearstream Fund Centre classifies disclosure scenarios according to the following market categories:

Category 1

Markets where disclosure by Clearstream Banking as a custodian of Clearstream Fund Centre to issuers, investment fund managers and/or to regulators or market authorities is mandatory under applicable law;

Category 2

Markets where disclosure by Clearstream Banking as a custodian of Clearstream Fund Centre of account holders to issuers, investment fund managers and/or foreign regulators or market authorities is a legal obligation in respect of securities in specific circumstances;

Category 3

Markets where there is no obligation for Clearstream Banking as custodian of Clearstream Fund Centre to disclose account holders to issuers, investment fund managers and/or regulators, notwithstanding any disclosure requirement falling directly on clients of Clearstream Fund Centre, shareholders and/or beneficial owners or notwithstanding disclosure necessary to obey an enforceable judgement of the country in question.

Disclosure requirements – CSD Market - Greece

Disclosure Category: 1

CBL, acting as CFCL’s exclusive sub custodian, and as the holder of omnibus account at AthexCSD and registered intermediary, falls under the obligation to comply with the mandatory disclosure requirements as provided in Law 4569/2018 and Law 4548/2018 and disclose the name of the beneficial owner and their holdings.

In the case of holdings in Greek equities issued by credit institutions, investment firms and insurance companies, CFCL may fall under an obligation, under Law 4261/2014 and Law 4537/2018, to disclose the identity and holdings of clients holding applicable positions as set out in the Bank of Greece Governor's Act no. 142/11.6.2018.

CFCL may also fall under an obligation, in Law 3556/2007 implementing the EU Transparency Directive, amended by article 2 of the Law 4374/2016 and Significant Shareholder Law 3310/2005 amended by Law 3414/2005 and by Law 3592/2007, to disclose the name of its clients and their holdings on applicable securities.

Consent

In order to comply with the legislation as mentioned below, clients entering into transactions in the Greek domestic market consent and are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, the listed company or its agent or the regulator) as their attorney-in-fact, under power of attorney, to collect from CFCL such information as is required to be disclosed. Clients who do not want to grant such authority to CFCL should refrain from holding such shares in their account with CFCL.

Background and legal basis

Disclosure requirements applicable to securities held by registered intermediary on an omnibus account.

Pursuant to Law 4569/2018 and Law 4548/2018 disclosure is mandatory:

At the request of the issuers (meaning the issuers of securities on a regulated market) to identify the information of their shareholders who will keep their securities in an omnibus account in the DSS system of AthexCSD, whenever they wish to do so and for the purpose of participation in a general meeting or occasionally. Failure to identify the shareholders of listed companies by the relevant record date, results in the deprivation of the right of participation and vote in the GM, corresponding to the respective shares. Lack of identification or belated identification does not impact the validity of the GM resolution.
At the request of the supervisory authorities.

Shares in Greek credit institutions, investment firms and insurance companies

Law 4261/2014, in conjunction with the Bank of Greece Governor’s Act 142/11.6.2018, set out the regulatory process for the acquisition, increase or decrease of a qualifying holding in a Greek credit institution (for instance, a holding representing 10% or more of the shares and/or voting rights in a credit institution). In particular, pursuant to this framework, persons intending to acquire directly or indirectly a holding of at least 5% in a Greek credit institution are required to give Bank of Greece prior notification of such intention and of the percentage to be acquired, in which case the Bank of Greece will assess whether such holding will lead to a significant influence over the credit institution and, if so, will notify the proposed acquirer and conduct an assessment on the conditions required for the acquisition. The aforesaid obligation also applies if the holding reaches or exceeds the thresholds of 20%, 33% or 50% of the total voting rights of the Greek credit institution or such credit institution becoming a subsidiary of such person (the “Qualifying Holder”). In case the Qualifying Holder is a legal entity, it must disclose to the Bank of Greece the identity of the members of its board of directors, of its most senior officers, of its shareholders holding at least 5% or above or its share capital, and where appropriate, its beneficial owner.

In addition, the Bank of Greece, for the purposes of efficient supervision, transparency and prevention of conflict of interest, is entitled to request information on any person or legal entity that holds either directly or indirectly a stake or voting rights exceeding 1% of share capital of a credit institution falling under the supervision of the Bank of Greece. The obligation to disclose falls on CFCL, as account holder in Greece, and on CFCL’s clients and is to be cascaded down to final beneficial owner.

Similar reporting obligations are imposed over shareholders holding at least 10% of the voting rights of investment firms and insurance companies; for the latter the reporting must be done to the Private Insurance Supervisory Commission.

Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC with regard to the encouragement of long-term shareholder engagement (the second shareholder’s rights directive “SRD II”) has been transposed into local law by virtue of Greek Law 4706/2020, published in the Greek Government Gazette issue 136/A/17.07.2020 (the “SDR II Law”).

Securities admitted to trading on an organized market

Disclosure is applicable in relation to Law 3556/2007, amended by Article 2 of Law 4374/2016, applicable to securities admitted to trading on an organized market, whereby notification must be made by both the registered owner and the beneficial owner of the voting rights to the Hellenic Capital Market Commission (HCMC) and to the issuing company in either of the following cases:

Acquisition or disposal reaching, exceeding or falling below 5%, 10%, 15%, 20%, 25%, ⅓, 50% and ⅔ thresholds of the total voting rights granted by the issuing company. The voting rights are calculated on the basis of all the securities to which voting rights are attached, even if the exercise thereof is suspended; or

The same obligation applies when the proportion reaches, exceeds or falls below the thresholds mentioned above as a result of events changing the breakdown of voting rights; or

Shareholders with at least 10% of voting rights must also notify the issuer and the HCMC for any increase or decrease of at least 3%. The obligation to notify also applies to each subsequent acquisition or disposal (of the above threshold of 3%).

The above notification requirements also apply to a person entitled to acquire, or to dispose of, or to exercise voting rights in any of the following cases or combination of:

Voting rights held by a third party with whom the person has concluded an agreement, which obliges them to adopt, by concerted exercise of the voting rights they hold, a lasting common policy towards the management of the issuer in question;

Voting rights held by a third party under an agreement concluded with that person providing for the temporary transfer for consideration of the voting rights in question;

Voting rights attached to securities which have been given as collateral to such person, provided that such person controls the voting rights and declares its intention of exercising them;

Voting rights attached to securities to which such person is a life usufructuary;

Voting rights which are held or may be exercised within the meaning of above points by such person’s-controlled undertaking;

Voting rights attached to securities deposited with that person which the person can exercise at its discretion in the absence of specific instructions from the shareholders;

Voting rights held by a third party in its own name on behalf of the person;

Voting rights which the person may exercise as a proxy where the person can exercise the voting rights at its discretion in the absence of specific instructions from the shareholder;

In case the person is a UCITS Management Company, voting rights held by, acquired or disposed of by the UCITS managed by it.

The above notification requirements also apply to a person who holds, directly or indirectly, financial instruments:

i) That, on maturity, give the holder, under a formal agreement, either the unconditional right to acquire or the discretion as to his right to acquire, shares to which voting rights are attached, already issued, of an issuer whose shares are admitted to trading on a regulated market;

ii) Which are not included in point (i) but which are referenced to shares referred to in such point and with economic effect similar to that of the financial instruments referred to in such point, whether or not they confer a right to a physical settlement.

The HCMC has clarified that warrants issued by the Hellenic Financial Stability Fund in the Greek banks’ re-capitalization and restructuring process are regarded as such financial instruments triggering notification requirements (as stated in points 1-3 above). For the calculation of the transparency reporting threshold, the existing voting rights held by an investor under the shares are added to those that the investor is entitled to acquire (in the future) under the warrants.

The notification to the issuer and the HCMC must be made as soon as possible and no later than close of business three trading days after the trade date.

The notification is to be submitted through a form available on the HCMC website.

The disclosure requirements provided for the first three above points do not apply in the following cases:

A. To securities acquired for the sole purpose of clearing and settlement within the usual short settlement cycle;

B. To custodians holding securities in their custodian capacity provided that such custodians may only exercise the voting rights attached to such securities under instructions given in writing or by electronic means. The HCMC has the opinion that such notification does not apply to registered shareholders who act in the capacity of a custodian, as long as they exercise the voting rights only by an order from the investor (in writing or via electronic means). In further details, the HCMC has clarified that the custodian, who invokes the said exception, must be in a position to prove that the prerequisites of the law concur. Therefore, the custodian must directly, subsequent to a relevant request by the HCMC:

Prove that it legally provides the ancillary service of administrative custody and management of financial instruments;
Produce evidence (for example, the contract between itself and its investor) from which it can be proven that it holds the shares in its capacity as custodian, even if such shares are held in its name;
Produce evidence from which it arises that it exercises the voting rights attached to such shares on the sole basis of orders provided in writing or via electronic means;
Announce the name of its investors on whose account it holds such shares and the number of shares that correspond to each investor.

C. To a market maker acquiring or disposing of a holding reaching or crossing 5% threshold, provided that:

The market maker is authorised by its home Member State under Directive 2004/39/EC; and
It neither intervenes in the management of the issuer concerned nor exerts any influence on the issuer to buy such securities or back their price.

CFCL falls under category B above.

Other reporting obligations

Obligation to report transactions handled by specified persons within a listed company

The Law 4443/2016 implemented relative EU directives on insider dealing and market manipulation, accepted practices and the notification of suspicious transactions.

Obligation to report with respect to takeover bids

Under Article 24, Paragraph 2 (b) of Law 3461/2006 on Takeover bids, any natural or legal person acquiring at least 0.5% of the voting rights of either (i) the Offeree Company (being the company that is the subject of a Takeover Bid) or (ii) the Bidder Company or (iii) any other company whose shares are offered as consideration in a takeover bid, is obliged (a) to report each such acquisition to the HCMC and (b) to publicize it to the ATHEX Daily List, along with the following data:

The volume of such voting rights acquired (the exact percentage);
Such acquisition’s price on each acquisition day;
Any voting rights of such company already held by it.

The above disclosure must be made by the beneficial owner no later than on the day following any such acquisition and such obligation also applies for any natural or legal person acquiring such percentage through any other person acting on its behalf, or through any other person acting in coordination with it or through a company controlled by such person as per provisions of Article 3 of Law 3556/2007, as amended by Law 4374/2016 (that is, such person holds the majority of voting rights on such company or has the right to appoint or revoke the majority of the members of such company’s board of directors, management or supervision and is at the same time such company’s shareholder, or is shareholder and sole controller of voting rights, under any contractual agreement with the other shareholders of such company).

Please refer to the Disclosure Requirements - Greece for more information.

CFCL Investment regulation – Greece