188 5 Equity and Shareholders’ Capital
- the prohibition of market manipulation (the Directive on market abuse);
- the duty to disclose material holdings (the Transparency Directive and the Di-
rective on takeover bids); - the duty to disclose structural takeover defences (the Directive on takeover
bids); and - disclosure duties in the context of public takeover bids (the Directive on takeo-
ver bids).
The principle of home country control applies. The principle of home country con-
trol influences the governing law, as each competent authority will apply the law
of its own country. Many questions will therefore be governed by the law of the
country of incorporation.
This does not mean that issuers would not have any choice or that there would
not be any regulatory competition.^231 It is easy for the firm to change its country of
incorporation and the place of its legal seat (see Volume I).
Furthermore, the disclosure regime does not mean the harmonisation of Mem-
ber States’ choice of law rules or civil liability regimes (see section 5.9.8).
The Financial Services Action Plan. The mandatory information management
regime was introduced by the Financial Services Action Plan (FSAP). The FSAP
was a package of measures to establish a common financial disclosure regime
across the EU for issuers of listed securities.
Its “disclosure and transparency agenda” consisted of the following legislative
projects: the IAS Regulation; the Directive on Market Abuse which requires issu-
ers to publish inside information; the Prospectus Directive which deals with initial
disclosure requirements at the point of public offer of securities/its admission to
trading on a regulated market; and the Transparency Directive. In addition to these
legislative projects, the FSAP contained the Directive on statutory audits.
The FSAP was complemented by the Takeover Directive which lays down both
disclosure requirements and conduct rules relating to mandatory or voluntary bids.
For example, the Takeover Directive contains a “break-through rule” which seeks
to limit the effect of restrictions on voting rights provided for in the articles of as-
sociation of the target company or in contractual agreements.
Level of harmonisation, regulated markets. The FSAP has led to a high degree
of harmonisation. Because of the use of “regulated markets” as a regulatory cate-
gory, the mandatory information management regime applies to securities admit-
ted to trading either on an “official” market regulated by the competent supervi-
sory authority or on an “exchange-regulated” market regulated by the operator of
the market. “Regulated markets” have been defined in the MiFID.^232 The MiFID
authorises each Member State to confer the status of “regulated market” on mar-
kets which are constituted on its territory, comply with its regulations, and are no-
tified to the Commission as a regulated market.^233
(^231) For the absence of issuer choice, see See Moloney N, EC Securities Law. OUP, Oxford
(2008) p 136.
(^232) Article 4(1)(14) of Directive 2004/39/EC (MiFID).
(^233) Article 47 of Directive 2004/39/EC (MiFID). See OJ C 057, 1 March 2008 pp 21–27.