218 5 Equity and Shareholders’ Capital
tive. The Transparency Directive sets “high-level requirements in the area of dis-
semination of regulated information” and requires “active distribution of informa-
tion from the issuers to the media, with a view to reaching investors”. This is
“necessary to ensure that investors, even if situated in a Member State other than
that of the issuer, have equal access to regulated information”. Furthermore,
“regulated information should be disseminated in a way that ensures the widest
possible public access, and where possible reaching the public simultaneously in-
side and outside the issuer’s home Member State”.^416 Typically, the issuer and its
representatives can thus be sued either in their own home Member State or
States^417 or, alternatively, in any other Member State (place of harmful event or
place of consequential damage)^418 to the extent that a plaintiff has sustained dam-
age in that state.^419
Prospectus liability is governed by the same rules. The issuer and its representa-
tives can thus be sued in civil law cases either in their own home Member State or
a Member State where the offer was made and the prospectus published (place of
harmful event or place of consequential damage).
5.9.9 Delisting
Delisting means that securities admitted to trading on a certain market will cease
to be admitted to listing and trading on that market. If those securities will not re-
main admitted to trading on any market, delisting is part of a going private trans-
action.
Reason to delist securities or to go private. There can be many reasons to delist
securities or to go private. The main reasons include: the cost of maintaining a list-
ing; the fear of class actions in the US; and increased flexibility after going pri-
vate.
A stock exchange listing – especially a first-tier listing – can be expensive. In
addition to the direct costs of listing, the firm must incur compliance costs. For
some firms, the costs of maintaining a listing outweigh the benefits.
The costs are higher in the case of multiple listings, that is, where securities is-
sued by the firm are listed in more than one venue. For example, Nokia shares
were traded only on the Helsinki Exchanges and the NYSE in 2008. The Nokia
share has been delisted from the London Stock Exchange, the Frankfurt Stock Ex-
change, the Stockholm Stock Exchange, and the Paris Stock Exchange, because
most of the trading took place on the Helsinki Exchanges.
(^416) Recitals 15–17 of Directive 2007/14/EC.
(^417) Article 2(1) of Regulation 44/2001 (Brussels I Regulation).
(^418) Article 5(3) of Regulation 44/2001 (Brussels I Regulation); Case 21/76 Mines de
Potasse d’Alsace [1976] ECR 1735. See also Article 6.
(^419) Case C-68/93 Fiona Shevill, Ixora Trading Inc., Chequepoint SARL and Chequepoint
International Ltd v Presse Alliance SA C-68/93 [1995] ECR I-415.