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Transparency requirements

The law of January 11 2008 on the transparency requirements for information about issuers whose securities are admitted to trading on a regulated market, and its implementing decree of the same date, were published in the Luxembourg Official Gazette on January 15 2008. They are now in force. They transpose Directive 2004/109/EC of the European Parliament and of the Council of December 15 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market. The law applies to issuers of transferable securities admitted to trading on the Luxembourg Stock Exchange, with the exclusion of shares or units issued by collective investment undertakings other than those of the closed-end type.

The transparency obligations of this law are threefold. First, periodic information will have to be published, which shall include annual financial reports and half-yearly financial reports. In addition, issuers have the option of either (i) making a public management statement in the course of each relevant six-month period or (ii) publish quarterly financial reports. Second, information about a big holding will be communicated when a shareholder acquires or disposes of shares of a covered issuer and the proportion of voting rights held by the shareholder following the acquisition or disposal reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 30%, 50% and 70%. Third, continuing information will also ensure that the treatment of holders of securities remains equal.

The information will have to be communicated to reliable media for the effective dissemination of information to the public throughout the Community. In addition, and while no officially appointed mechanism is appointed in Luxembourg, the issuers will publish this information on their website. In the meantime, the Commission de Surveillance du Secteur Financier (CSSF) must receive a copy of such information.

Issuers from third countries may be exempted by the CSSF from obligations other than those relating to large holdings, provided that a set of financial statements is required in their jurisdiction in addition to the interim management report. That report must include at least (i) a review of the period covered (ii) indications of the issuer's likely future development for the remaining six months of the financial year and (iii) details of big related parties' transactions for issuers of shares, if they do not already disclose it on a regular basis.

By Pamela Gonzales de Cordova and Thibaut Partsch

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