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Proposed amendments to the Austrian Stock Exchange Act

Christian Temmel

The Austrian legislator has recently presented a proposal for the amendment of the Austrian Stock Exchange Act, in particular in order to reflect the changes required due to the implementation of Directive 2010/73/EU. However, some changes of the proposed changes are driven exclusively by national requirements and intentions.

The maximum fines for certain administrative offences are increased: while the fines now range from €30,000 ($39,000) up to €50,000, it is intended to increase this range substantially to €100,000 to €150,000.

According to the draft amendment act, it is also proposed to abolish the so-called annual document, the document by which issuers are required (according to Article 10 of the Prospectus Directive, Directive 2003/71/EC, as amended) to provide, at least annually, a document that contains or refers to all information that they have published or made available to the public over the preceding 12 months in one or more Member States and in third countries in compliance with their obligations under Community and national laws and rules dealing with the regulation of securities, issuers of securities and securities markets.

The current prospectus threshold of €50,000 for security issues will be raised to €100,000, so that only issues with a denomination of €100,000 or above will be excluded from the prospectus requirement.

There will also be a change to the requirement to disclose shareholdings. The current regime requires shareholders, in addition to direct or indirect shareholdings, to announce the holding of only certain derivative financial instruments (but not all) which grant the right to acquire shares in a listed company.

It is therefore now proposed to include both the changes in shareholdings of syndicated groups of shareholders as well as financial instruments which allow the acquisition of shares in a way other than straight call options: at present, only such options are covered (and need to be disclosed) which grant the right to acquire shares. In order to cover also other instruments (or instruments which are simply structured in a certain way) which allow the silent sneaking-up to a certain position, however, it is proposed to fill this gap and to cover all such instruments. Convertible bonds which were not included will be included in the future.

Another important change will be the sanction for not disclosing (or not correctly disclosing) shareholdings and rights on shareholdings: while the incorrect disclosure constitutes currently an administrative offence, it is proposed that any incorrect disclosure will have the effect that no voting rights are granted for those shareholdings which have not been correctly disclosed. The draft amendment to this provision contains certain reliefs for shareholdings below 15%, however.

The amendment to the Austrian Stock Exchange Act should enter into force on July 1 2012.

Dr Christian Temmel

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