Information and transparency are essential elements for the adequate operation of securities markets and fundamental to their development and consolidation.

Acutely aware of this, European legislators, in the context of the European Union (EU) Financial Services Action Plan approved by the European Commission in 1999, adopted Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market. As established in the Directive, efficient, transparent and integrated securities markets contribute to a genuine single market in the Community and foster growth and job creation by better allocation of capital and by reducing costs. The disclosure of accurate, comprehensive and timely information about security issuers builds sustained investor confidence and allows informed assessment of their business performance and assets and, ultimately, this enhances both investor protection and market efficiency.

Spain recently implemented the Community transparency requirements in relation to information about issuers whose securities are listed on a Spanish official secondary market or on any other EU-regulatefd market. The implementation began by passing Law 6/2007 of 12 April last year and was completed with Royal Decree 1362/2007 on 19 October last year – the decree related to transparency requirements in relation to information about issuers of listed securities and came into force on 20 December (although certain provisions only applied to the financial statements for periods commencing after 1 January, 2008).

In this respect, in line with Community legislation a new statutory class of information, 'regulated information', is created in Spain. This will consist, firstly, of the public periodic information contemplated in articles 35 and 35 (revised) of the Spanish Securities Market Law that issuers should make public and disclose to the market (annual and half-yearly reports and interim management statements or quarterly reports). Secondly, it will mean there is ongoing information about issuers that should be made available to the public and disclosed (relevant information according to the system of market abuse, information about the total number of voting rights and capital, identity of significant shareholders and treasury stock transactions). Regulated information includes all information generated by the issuer and information in relation to major holdings in its capital which, although not generated by the issuer, implies a specific disclosure obligation.

Spanish legislation establishes the obligation of issuers of securities admitted to trading on an official secondary market or other EU-regulated market to make public and disclose such regulated information and to remit it simultaneously to the Spanish National Securities Market Commission (CNMV).

In this respect, the issuer must publish the regulated information on its webpage and simultaneously disseminate it through means that ensure fast access to such information on a non-discriminatory and general basis by the public in the EU, without collecting any specific cost from investors for providing the information.

In addition, the Royal Decree develops obligations to provide information on major holdings and treasury stock. For example, it specifies the percentages of voting rights that will be deemed to be a major proportion, establishing that voting rights will be calculated computing all the shares to which voting shares are attached, even in those cases in which exercise of such rights are suspended, on the basis of the total number of voting rights according to the most recent disclosure made by the issuer and published in the web page of the CNMV. If the total number of voting rights of the issuer changes, the respective disclosures of major proportions should be made also to the extent that this is appropriate in accordance with the resulting new proportions of voting rights held.

Another new feature worth noting is the obligation to disclose major holdings, as this is not limited to the acquisition or transfer of shares and extends also to the acquisition or transfer, directly or indirectly, of financial instruments that confer the right to acquire, exclusively on the initiative of the holder and under a formal agreement, shares already issued and which confer voting rights.

The maximum term for notification is established at four stock exchange day. The Decree also regulates those persons other than the shareholder who are obliged to notify the major holding, the exceptions to the obligation to notify and the content of the disclosures, establishing provisions in relation to special events of notification of major holdings.

In addition to the above, the Decree specifies certain disclosure obligations of the issuer in relation to the shares it holds (treasury stock), such as the percentage of voting rights that gives rise to its disclosure obligation (1%) and the content of the disclosure.

The importance of the reviewed legislation, together with the remaining legislation in relation to the information to be provided to the securities markets, is beyond any doubt and contributes decisively to promote a more transparent and efficient performance of our securities markets and, ultimately, of the Spanish economy as a whole.

Fernando Vives Ruiz is a partner and head of the commercial department at Garrigues in Madrid.