5.9 Listing and the Information Management Regime 185shares may be changed within the limits of a minimum and maximum number
without amending its statutes; the shares have an accountable par value instead of
a nominal value; and the company has shares which carry a limited right to par-
ticipate in distributions and/or in the company’s assets in the event of liquidation.
In addition, the discretion of the board may be increased by authorising the
board to decide on share issues and the waiver of pre-emption rights as well as on
share buybacks (for share buybacks, see section 10.2.4).
Transferability of shares. Shares admitted to trading on a regulated market
must be freely transferable.^220 In addition, a sufficient number of shares (at least
25%) must be distributed to the public.^221 This can make takeover defences more
important (Volume I). During public takeover bids, the use of some takeover
defences is constrained by the provisions of the Takeover Directive (prohibition to
frustrate the bid, requirement of shareholders’ consent; see section 17.4).
Information management regime: general remarks. Listed companies must
comply with a large and mandatory information management regime. There is
plenty of EU legislation and accordingly plenty of implementing legislation in the
Member States in this area. The purpose of this regime is to abolish differences
between Member States regarding financial information disclosed by listed com-
panies. This regime will be discussed in the following section.
5.9 Listing and the Information Management Regime
5.9.1 Introduction
When choosing where to have its shares admitted to trading, the company can
choose between different markets in different countries. For example, a certain
country can attract investors and issuers by the size, liquidity, efficiency and
transparency of its financial markets compared with markets in other countries.^222
In any case, the existence of a mandatory and extensive information manage-
ment regime is characteristic of stock exchange listings. The basic characteristics
of this regime are more or less the same for all companies whose shares have been
admitted to trading on a regulated market in the EU. A regulated market means a
trading system which is authorised and functions regularly in accordance with the
MiFID.
Key objectives. This regulatory regime has two key objectives. (1) The first is
to increase economic growth and job creation by reducing financing costs for issu-
ers. This is done in three main ways. The regulatory regime is designed to reduce
investors’ perceived risk. It is also designed to reduce investors’ and issuers’
(^220) Article 46 of Directive 2001/34/EC (Listing Directive).
(^221) Article 49 of Directive 2001/34/EC (Listing Directive).
(^222) Forbes KJ, Why Do Foreigners Invest in the United States? NBER Working Paper
13908 (April 2008).