With effect from 31 December 2020, the London Stock Exchange’s Main Market (“LSE”) is no longer an EU regulated market. This change in status has implications for transparency law obligations of Irish-incorporated issuers with securities admitted to trading on the LSE. 

Dual-listed issuers

Irish-incorporated companies with shares admitted to trading on both the LSE and an EU regulated market, such as Euronext Dublin, are now subject to obligations under the FCA Disclosure and Transparency Rules (“DTRs“), in addition to their existing obligations under EU transparency law. 

Notification of major shareholdings 

Shareholders are now required to notify dual-listed issuers and the relevant competent authority (FCA or Central Bank of Ireland, as appropriate) of their holdings under both regimes as follows:

• under the DTRs, where the percentage of voting rights they hold in the issuer reaches, exceeds or falls below 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75%; and
• under EU transparency law as implemented in Ireland, where the percentage of voting rights they hold in the issuer reaches exceeds or falls below 3% and each whole percentage thereafter.

Issuers will in turn be required to publish any notifications received from holders of voting rights within the applicable timeframes.

Governance

Dual-listed issuers will also be required to comply with the obligations of the DTRs in respect of material related party transactions and corporate governance statements, in addition to continuing to comply with the equivalent obligations under Irish law. While these requirements are currently largely similar to Issuers’ existing obligations under Section 1110O (in the case of material related party transactions) and Section 1373 (in the case of corporate governance statements) of the Companies Act 2014, the provisions are not identical and issuers should continue to be mindful of any future practical differences in the requirements of the FCA as well as the potential for future divergence between the two regimes.

LSE only-listed issuers

Irish-incorporated companies with shares admitted to trading on the LSE only are no longer subject to EU transparency law and instead are exclusively subject to the UK DTRs. 

Notification of major shareholdings 

The obligations relating to the disclosure of major shareholding will now apply as follows:

• under the DTRs, shareholders are required to notify their holdings to issuers and the FCA where the percentage of voting rights they hold in the issuer reaches, exceeds or falls below 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% (this is a change from the current notification threshold of 3% and each whole percentage point above 3% that previously applied to issuers under EU transparency obligations);
• under the Companies Act 2014, shareholders are required to notify the issuer (only) where the percentage of shares held reaches, exceeds or falls below 3% and each
  whole percentage point above 3%.

In practice, this means issuers will still be notified of >3% holdings, but will only be required to issue announcements for notifications received under the DTRs (and not under the Companies Act requirements).

Governance 

Issuers must now comply exclusively with the DTR obligations relating to material related party transactions and corporate governance statements, in place of their existing obligations under Section 1110O (in the case of material related party transactions) and Section 1373 (in the case of corporate governance statements) of the Companies Act 2014. 

Further information is available from your usual Arthur Cox contact.