216 5 Equity and Shareholders’ Capital
States “to impose criminal sanctions and without prejudice to their civil liability
regime”.^401
Periodic information. After the amendment of the Fourth and Seventh Com-
pany Law Directives,^402 the “administrative, management and supervisory bodies”
of a company are, as a minimum requirement, collectively responsible for drawing
up and publishing annual accounts and annual reports.^403 Typically, all board
members are collectively responsible for financial statements and key non-
financial information and all board members are held accountable for their actions
and proper conduct of their responsibilities. Again, sanctions for breach of duty
are based on national law. The minimum requirement is that penalties for in-
fringements are “effective, proportionate and dissuasive”.^404
Statements under the Transparency Directive must be made by “persons re-
sponsible within the issuer”.^405 They should also be liable for the breach of disclo-
sure obligations based on the Transparency Directive.^406
Ad-hoc disclosure, takeovers. As regards ad-hoc disclosure, Member States
have a duty to designate the categories of persons that are responsible. Sanctions
for non-compliance must be “effective, proportionate and dissuasive".^407 In the
context of public takeover bids, the boards of the participating companies have
certain disclosure duties.^408
Risk management, governing law and international jurisdiction. The issuer can
reduce risk by trying to comply with provisions of the governing law, by avoiding
the scope of certain countries’ laws; and by limiting the legal relevance of dis-
closed information in other ways (for compliance and information management,
see Volume I).
The most important connecting factor on the basis of which the governing law,
the jurisdiction of supervisory authorities, and the international jurisdiction of
courts are determined according to FSAP directives is the home Member State of
the issuer. However, there are even other connecting factors.
Governing law. The principle of home country control influences the question
of governing law, as each competent authority applies the law of its own country.
As a rule, the issuer’s home Member State is the connecting factor for issuer
disclosure according to FSAP directives. As regards prospectuses, the home
Member State of the issuer is thus regarded as the one best placed to regulate the
(^401) Article 25(1) of Directive 2003/71/EC (Prospectus Directive).
(^402) Directive 2006/46/EC.
(^403) Article 50b of Directive 78/660/EEC (Fourth Company Law Directive), inserted by Ar-
ticle 1(8) of Directive 2006/46/EC.
(^404) Article 60a of Directive 78/660/EEC, inserted by Article 1(10) of Directive 2006/46/EC.
See already Article 6 of the Directive 68/151/EEC (First Company Law Directive).
(^405) Articles 4(2)(c) and Article 5(2)(c) of Directive 2004/109/EC (Transparency Directive).
(^406) Article 7 of Directive 2004/109/EC (Transparency Directive). See also Article 24.
(^407) Article 14(1) of Directive 2003/6/EC (Directive on market abuse).
(^408) For sanctions, see Article 17 of Directive 2004/25/EC (Directive on takeover bids).