Disclosure Office Notice of 7 April 2009 I/09

Transcription

1 Disclosure Office Notice of 7 April 2009 I/09 Fulfilment of disclosure obligations in the prospectus Summary: Disclosure requirements for IPOs (replaces Disclosure Office Notice I/99) The disclosure obligations of significant shareholders can be fulfilled at the time of an initial public offering by presenting the appropriate information in the listing prospectus (previous practice). As a part of this, all information required under the Stock Exchange Ordinance-FINMA (SESTO-FINMA) must be disclosed. The issuer must publish this information within two trading days subsequent to the IPO by means of the electronic publication platform of the Disclosure Office (DO) in keeping with Art. 23 para. 1 SESTO-FINMA. The issuer s publication obligation can no longer be fulfilled by means of the prospectus (new practice). Fulfilment of shareholders disclosure obligations upon capital increases; treatment of subscription rights Shareholders whose participation reaches, exceeds or falls below a threshold value as the result of a capital increase may fulfil their disclosure obligation in the listing prospectus, whereby only the shareholder s current information can replace a disclosure in accordance with Art. 21 SESTO-FINMA. The issuer must publish this information within two trading days subsequent to the capital increase by means of the electronic publication platform of the Disclosure Office in keeping with Art. 23 para. 1 SESTO-FINMA. The issuer s publication obligation can no longer be fulfilled by means of the prospectus (new practice). If, as a direct result of their shareholder status, shareholders are granted subscription rights in proportion to their previous equity holdings, the subscription rights are not subject to the disclosure requirement. The issuer as well need not disclose the issuance of such subscription rights within the scope of the sale positions as per Art. 12 para. 1 lit. b SESTO-FINMA. A derivative acquisition of subscription rights, e.g. by means of a trading in rights on the SIX Swiss Exchange, leads to a disclosure obligation if as a result the threshold values under Art. 20 para. 1 SESTA are reached or exceeded.

2 Disclosure in connection with an over-allotment (greenshoe) option Disclosure in connection with a potential over-allotment option essentially involves the same information as that required from underwriters in the case of a firm deal underwriting (see below), but in addition the granting of the greenshoe option must be disclosed as a sale position (Art. 12 para. 1 lit. b. SESTO-FINMA). In the section Significant shareholders as per Point Scheme A, a reference must be made to the place(s) in the prospectus where this information has been disclosed. The issuer is not obligated to publish this information via the electronic publication platform according to Art. 23 para. 1 SESTO-FINMA. Disclosure obligations for underwriters of firm deals (replaces Disclosure Office Notice I/01) The disclosure obligations for underwriters of firm deals in connection with a capital increase can be fulfilled if the following information, at minimum, is provided in the prospectus (previous practice): - The names (each with registered office and complete address) of all syndicate members that have underwritten a proportion of the shares or the purpose of placing the shares with the public; - Type and maximum number of shares that have been or will be underwritten by the syndicate; - The (maximum) proportion of voting rights associated with the underwritten shares; - The time frame in which the syndicate is likely to hold the underwritten shares. In the section Significant shareholders as per Point Scheme A, a reference must be made to the place(s) in the prospectus where this information has been disclosed. The issuer is not obligated to publish this information via the electronic publication platform according to Art. 23 para. 1 SESTO-FINMA. In the case of an IPO, the placing consortium bears no reporting obligation within the context of Art. 20 SESTA as long as the part of the issuance process subject to disclosure obligations has been accomplished prior to the listing. 2

3 Eased disclosure of lock-up groups in the prospectus Lock-up groups may waive full disclosure of all group members in the prospectus if the following requirements are fulfilled: - The precise duration of the lock-up agreement(s) [indication of date(s)] and the counterparty (e.g. issuer or underwriting consortium) are disclosed. In the case of different periods of validity, the following information must be disclosed for each instance. - The number of group members, the type and total number of equity securities held, the total proportion of the corresponding voting rights, and the group representative. - Disclosure of the names and addresses of the individual shareholders can be waived if they directly or indirectly own less than 3% of the company s voting rights. - Shareholders who directly or indirectly represent 3% or more of the voting rights are to be disclosed by indication of the company name, registered office and address or the name and place of residence of the given person, as well as the number of shares held directly or indirectly and the corresponding proportion of voting rights. If at later date their holdings reach or exceed a threshold value as per Art. 20 para. 1 SESTA, a renewed group-wide disclosure obligation is triggered. - The issuer must disclose this information within two trading days via the electronic DO publication platform in keeping with Art. 23 para. 1 SESTO- FINMA. A renewed notification and publication upon expiry of the lock-up agreement is not required. - Should a notification and publication requirement arise during the term of the lock-up agreement, each report and publication must contain the latest and most complete details. Changes in the composition of the group are to be disclosed and published if shareholders who represent 3% or more of the voting rights join or depart the group during the term of the lock-up agreement(s). - Upon expiry of the lock-up agreement(s), all shareholders who hold 3% or more of the voting rights must report that fact to the issuer and the Disclosure Office within four trading days (Art. 22 para. 1 SESTO- FINMA). - Group members are subject to the notification requirement for equity securities of the issuer that they hold outside the group, regardless of their locked holdings. These non-locked shares need only be disclosed if they represent 3% or more of the total voting rights. The related disclosure must also include a remark that the shares are held outside the group and are not locked up as well as reference to the disclosure notification of the lock-up group in which the shareholder is a member. If these requirements are not fulfilled, a complete disclosure of all group members must be made. Reserved in this regard is an application for exemptions and easier disclosure according to Art. 24 SESTO-FINMA. 3

4 1. Disclosure requirements for IPOs (replaces Disclosure Office Notice I/99) According to the consistent practice of the DO, the disclosure obligations of significant shareholders can be fulfilled at the time of an initial public offering by presenting the appropriate information in the listing prospectus. As a part of this, all information required under SESTO- FINMA must be disclosed. However, the issuer s publication obligation can no longer be fulfilled by means of the prospectus (new practice). The issuer must publish the relevant information on the reported significant shareholders within two trading days subsequent to the IPO by means of the electronic publication platform of the Disclosure Office in keeping with Art. 23 para. 1 SESTO-FINMA. Only in this way can it be ensured that market participants have sufficient information on the significant shareholders. 2. Disclosure obligations upon capital increases Subscription rights Under Art. 652b para. 1 Swiss Code of Obligations, subscription rights grant shareholders a claim to the proportion of newly issued shares that corresponds to their previous holdings. They therefore represent the shareholder s right to retain a proportionate equity interest in the company. To the extent that shareholders receive the subscription rights as an immediate result of their previous proportionate shareholding, which applies in the case of a capital increase via a firm-deal consortium underwriting while maintaining the shareholder s subscription rights, those shareholders are not subject to the disclosure requirement because the rights merely represent the legally foreseen consequence of a capital increase and ultimately, after completion of the capital increase, change nothing in terms of the shareholders effective ownership proportion, provided they in fact exercise their subscription rights. In the same vein, the issuer as well need not disclose the issuance of such subscription rights within the scope of the sale positions as per Art. 12 para. 1 lit. b SESTO-FINMA. However, a derivative acquisition of subscription rights, e.g. by means of a trading in rights on the SIX Swiss Exchange, leads directly to a disclosure obligation if as a result the threshold values under Art. 20 para. 1 SESTA are reached or exceeded. According to Art. 12 para 2 SESTO- FINMA, the basis for calculating the threshold value is the total number of voting rights entered in the commercial register at the corresponding point in time. Fulfilment of shareholders disclosure obligations upon capital increases In terms of shareholders whose equity ownership reaches, exceeds or falls below a given threshold value in connection with a capital increase (e.g. as the result of a passive shortfall of the threshold value because the shareholder opted not to participate in the capital increase), the disclosure obligations can be fulfilled in the listing prospectus, whereby only the shareholder s current information can replace a disclosure in accordance with Art. 21 SESTO-FINMA. In contrast, shareholders who as a result of a capital increase have not reached, exceeded or fallen below a disclosable threshold value are not affected by the reporting requirement under Art. 20 SESTA. However, the issuer s publication obligation can no longer be fulfilled by means of the prospectus (new practice). The issuer must publish the relevant information on the reported significant shareholders, who in the course of the capital increase reach, exceed or fall below a threshold, within two trading days subsequent to the capital increase by means of the electronic publication platform of the Disclosure Office in keeping with Art. 23 para. 1 SESTO-FINMA. 4

5 3. Disclosure in connection with an over-allotment (greenshoe) option Disclosure in connection with an over-allotment option is analogous to the procedure applicable to underwriters of firm deals (see below). With the revision of Art. 20 SESTA, which entered into force on 1 December 2007, among other things the granting (writing) of subscription rights is now subject to the disclosure obligation. The company or major shareholder who grants the underwriting consortium an over-allotment option must under the given circumstances disclose it as a sale position (Art. 12 para. 1 lit. b SESTO- FINMA). Securities lending agreements concluded in this connection are to be disclosed in the prospectus in accordance with the requirements laid down in Art. 14 SESTO-FINMA, whereby in particular information on the duration of the agreements must be provided. In this respect the obligation to notify applies to the borrower (Art. 14 para. 2 lit. a SESTO-FINMA). In the section Significant shareholders as per Point Scheme A, a reference must be made to the place(s) in the prospectus where this information has been disclosed. The issuer need not publish this information via the electronic publication platform as per Art. 23 para. 1 SESTO-FINMA because this is a matter of short-term, transaction-related rights, the formal publication of which is considered superfluous. 4. Disclosure obligations for underwriters of firm deals (replaces Disclosure Office Notice I/01) IPO In the case of an IPO, the placing consortium bears no reporting obligation within the context of Art. 20 SESTA as long as the part of the issuance process subject to disclosure obligations has been accomplished prior to the listing. Firm deals within the scope of a capital increase that involve a prospectus As an organised group within the context of Art. 20 para. 3 SESTA and Art. 10 para. 2 lit. a SESTO-FINMA, an underwriting consortium is constituted for the coordinated acquisition of shares and is therefore fundamentally subject to the obligation to notify as a group. The Disclosure Office considers the notification and disclosure obligations arising from a firm deal underwriting to be fulfilled if the prospectus contains a brief description of the process associated with the firm deal transaction, whereby this also applies to underwriters disclosure obligations in the case of firm deals for convertible or warrant bonds. If only an offering prospectus is drawn up in accordance with the provisions of Swiss Code of Obligations, it must be submitted to the Disclosure Office. In the prospectus, at least the following information must be given (see also Arts. 10 and 21 SESTO-FINMA): Indication of all members of the consortium that have underwritten a proportion of the shares (including the registered office and complete address of each). The type and number of securities that have been underwritten by the syndicate. The related proportion of voting rights (in percent) in the given company. This information must be based on the latest amount of total capital entered in the commercial register and, if known already at the time the prospectus is printed, also on the capital that will be entered in the commercial register after completion of the capital increase. The maximum length of time the consortium will presumably hold the shares. This information must be disclosed collectively at a single place in the prospectus. However, the individual consortium members that have underwritten a proportion of the shares may, with an appropriate reference, also be listed elsewhere in the prospectus (e.g. on the cover) together with the necessary information (registered office, etc.). 5

6 The issuer need not publish this information via the electronic publication platform as per Art. 23 para. 1 SESTO-FINMA. If, on the first day of the listing of the new shares, a consortium member individually (or, if it continues to exist, the consortium collectively as a group within the context of Art. 10 SESTO- FINMA) holds three percent or more of the voting rights in the company after deduction of the firm allotment, that shareholding must be disclosed in accordance with the legal provisions at latest within four trading days (notification to the Disclosure Office and the company; publication of the notification by the company). This notification also applies to the disclosure obligations of underwriters firm deals pertaining to the issuance of convertible or warrant bonds. Firm deals within the scope of a capital increase that do not involve a prospectus In the case of a firm deal for a capital increase which does not incur the obligation to publish a prospectus, the consortium must issue a disclosure notification at latest within four trading days after it has entered into a firm deal agreement with the issuer, provided a disclosable threshold value has been reached or exceeded. The issuer must see to the publication of the notification in keeping with the relevant legal provisions. Pursuant to Art. 24 para. 1 lit. a und b SESTO-FINMA, it is possible to grant exemptions from or easing of the obligations to notify and publish, namely if the transaction is of a short-term nature and no intention to exercise voting rights is involved. A corresponding request must be submitted to the SIX Disclosure Office before entering into a firm deal agreement with the issuer (see Art. 24 para. 2 SESTO-FINMA). Firm deal by a single underwriter If it is not a consortium as a group within the context of Art. 10 para. 2 lit. a SESTO-FINMA but rather a single underwriter that enters into a firm deal, the latter is subject analogously to the same rules laid out in this notice. 5. Eased disclosure of lock-up groups in the prospectus 5.1 Lock-up agreements lead to the formation of a group Those who coordinate their conduct with third parties by contract or by any other organised methods with view to the acquisition or sale of equity securities or the exercise of voting rights are deemed to be acting in concert or as an organised group (Art. 10 para. 1 SESTO-FINMA). Under Art. 10 para. 2 lit. a SESTO-FINMA, such coordinated conduct is present if, among other things, a legal relationship exists for the purpose of acquiring or selling equity securities. Lock-up agreements that the previous shareholders concluded in parallel (vertically) acquire an effect that is similar to the conclusion of a shareholders agreement because the conduct of the shareholders in terms of the sale of equity securities is coordinated and individual preferences are subordinated in order to achieve a collective goal, i.e. an IPO. In accordance with the consistent practice of the DO and the Swiss Financial Market Supervisory Authority FINMA, this leads to the obligation to notify as a group within the context of Art. 10 SESTO-FINMA and with Art. 20 paras. 1 and 3 SESTA (DO annual report 2005; DO annual report 2006; FBC annual report 2005, p. 90). This view is also not changed by the fact that the shareholders do not conduct discussions as to the voting-rights proportions; it already suffices for the conclusion to be drawn that a group exists if coordinated behaviour is present in terms of the sale or non-sale of shares (Art. 10 para. 1 SESTO-FINMA), even if such is organised by third parties. 5.2 Treatment of non-locked shares For cases in which shareholders fulfil their obligation to notify due to the lock-up agreements as a group but hold or acquire other shares that are not locked up, the question arises as to how such non-locked shares should be treated. In the opinion of the Disclosure Office, those non-locked shares are not allocable to the participation of the group. This is due to the fact that all shares held by the group cannot be sold for a certain period of time. Adding the non-locked shares would contradict the purpose of a group disclosure notification regarding the locked shares. 6

7 Consequently, the question arises however as to whether the shares held outside the group have to be disclosed cumulatively with the locked shares of the group member or separately only once the unlocked shares have reached the 3% voting rights threshold. Were the given group member to be subjected to a cumulative individual notification obligation for the locked and unlocked shares (in addition to the obligation to notify as a group member), the locked shares would be reported twice, once by means of the group notification and a second time by the individual notification. On one hand it must be asked whether Art. 20 SESTA suggests such a dual notification but, on the other, the transparency required under Art. 1 SESTA tends to argue against this solution. Accordingly, group members should be obligated to disclose the shares they hold outside the group, and this separately from their locked shares. As a result, non-locked shares must be disclosed once the 3% voting rights limit has been achieved, whereby that calculation does not take into account the locked shares. In order to avoid misunderstandings in this regard, it is necessary that the corresponding notification indicates additionally that it refers to shares held outside the group that are not locked. Furthermore, reference to the lock-up group in which the shareholder is a member must also be made on the disclosure notification. 5.3 Eased conditions for lock-up groups The disclosure of all shareholders included in a lock-up group regularly causes problems because, especially when shares allotted to employees are also locked, there can frequently be groups that involve hundreds or even thousands of members. Add to that the fact that any change in the constituency of the group again incurs a comprehensive notification obligation (see Art. 10 para. 5 SESTO-FINMA and Art. 21 SESTO-FINMA). Although SESTO-FINMA, with the exception of Art. 18, does not provide for general exemptions from the obligation to notify but instead enables them to be granted only on the basis of a specific request (see Art. 24 SESTO-FINMA), the longstanding practice of the DO, which has been explicitly approved by FINMA (FBC-AR 2006, p. 69), is to view the notification obligations as being fulfilled in the prospectus, irrespective of Articles 22 and 23 SESTO-FINMA. In keeping with this longstanding practice, the Disclosure Office considers it proper to afford issuers and shareholders a practical solution for disclosing lock-up groups involved in an IPO, a solution that also provides more informational content for market participants. Eased conditions relating to the obligation to notify are permissible in particular when the related requirements ensure that transparency on the whole is enhanced. For such eased conditions to be granted to lock-up groups, this requires that the market is provided with additional information on the part of the group. In this sense, lock-up groups can take advantage of eased notification conditions if shareholders whose individual equity interest amounts to 3% or more of the voting rights disclose those holdings through indication of their names and their (individual) equity interest in the issuer. 7

8 5.4 Notification scheme for easier disclosure of lock-up groups For the foregoing reasons, lock-up groups can waive complete disclosure of all group members in the prospectus, provided the following conditions are met: - The precise duration of the lock-up agreement(s) [indication of date(s)] and the counterparty (e.g. issuer or underwriting consortium) must be disclosed. In the case of different durations, the following information must be disclosed for each instance: - The number of group members, the type and total number of equity securities held, the total proportion of the corresponding voting rights, and the group representative. - Disclosure of the names and addresses of the individual shareholders can be waived if they directly or indirectly own less than 3% of the company s voting rights. - Shareholders who directly or indirectly represent 3% or more of the voting rights are to be disclosed by indication of the company name, registered office and address or, as the case may be, the name and place of residence of the given person, as well as the number of shares held directly or indirectly and the corresponding proportion of voting rights. If as a result their holdings reach or exceed a threshold value as per Art. 20 para. 1 SESTA, a renewed group-wide disclosure obligation is triggered. - The issuer must disclose this information within two trading days via the electronic publication platform according to Art. 23 para. 1 SESTO-FINMA. A renewed notification and publication upon expiry of the lock-up agreement is not required. - Should a notification and publication requirement arise during the term of the lockup agreement, each report and publication must contain the latest and most complete details. Changes in the composition of the group are to be disclosed and published if shareholders who represent 3% or more of the voting rights join or depart the group during the term of the lock-up agreement(s). - Upon expiry of the lock-up agreement(s), all shareholders who hold 3% or more of the voting rights must report that fact to the issuer and the Disclosure Office within four trading days (Art. 22 para. 1 SESTO-FINMA). - Group members are subject to the notification obligations for equity securities of the issuer that they hold outside the group, regardless of their locked up holdings. These non-locked shares need only be disclosed if they represent 3% or more of the total voting rights. The related disclosure must also include a remark that the shares are held outside the group and are not locked up, as well as reference to the disclosure notification of the lock-up group in which the shareholder is a member. If these requirements are not fulfilled, a complete disclosure of all group members must be made. Reserved in this regard is an application for exemptions and eased disclosure according to Art. 24 SESTO-FINMA. Prior to its publication, this Notice was brought to the attention of the Swiss Financial Market Supervisory Authority (FINMA). 8

9 CONCORDANCE TABLE Notice I/09 dated April 7, 2009 Fulfilment of disclosure obligations in the prospectus Stock Exchange Act (SESTA) (Version as of the date of the notice) Stock Exchange Act (SESTA) (Version May 1, 2013) art. 1 art. 1 art. 20 para. 1 art. 20 para. 1 art. 20 para. 3 art. 20 para. 3 Stock Exchange Ordinance-FINMA (SESTO-FINMA) (Version as of the date of the notice) Stock Exchange Ordinance-FINMA (SESTO-FINMA) (Version May 1, 2013) art. 10 art. 10 art. 12 art. 12 art. 14 para. 2 lett. a art. 14 para. 2 lett. a art. 18 art. 18 art. 21 art. 21 art. 22 art. 22 art. 23 art. 23 art. 24 art. 24 Federal Act on the Amendment of the Swiss Civil Code (Part Five: The Code of Obligations) (Version as of the date of the notice) Federal Act on the Amendment of the Swiss Civil Code (Part Five: The Code of Obligations) (Version January 1, 2013) art. 652b para. 1 art. 652b para. 1