Implementation Of The Transparency Directive - Closed Ended Funds

Author:Ms Tara O'Callaghan
Profession:Dillon Eustace

The Transparency Directive (2004/109/EC) (the "TD") was implemented into Irish law on 13th June 2007 by the Transparency (Directive 2004/109/EC) Regulations 2007 (the "Regulations") and has effect from this date. The TD seeks to enhance transparency in EU capital markets in order to improve investor protection and market efficiency. The Regulations establish disclosure requirements on an ongoing basis for issuers with securities admitted to trading on a regulated market situated or operating within the EU.

The purpose of this memorandum is to provide an overview of the Directive, the Regulations and their scope, and to highlight their impact on the continuing obligations of listed closed ended funds. For the avoidance of doubt, collective investment undertakings of the open-end type are outside the scope of the TD.

In Ireland, the Financial Regulator will become the competent authority under the Regulations and will delegate specified tasks to the Irish Stock Exchange ("ISE") for an interim period as permitted by the TD. Certain on-going requirements currently set out in the continuing obligations section of the Listing Rules will be replaced by the provisions of the Regulations.

The new obligations imposed by the regulations are set out below:-

Disclosure of Periodic Financial Information (Regulations 4 to 9)

The following key changes for listed issuers arise under Regulations 4 to 9 which relate to the publication of periodic financial information:

(a) Shorter reporting deadlines (Regulations 4(2) and 6(2)(b))

Issuers are required to publish annual financial reports at the latest four months after the year end (currently allowed six months under the Listing Rules).

Issuers are required to publish half-yearly financial reports at the latest two months after the period end (currently allowed four months under the Listing Rules).

(b) Availability of annual and half-yearly reports (Regulations 4(2) and 6(2)(c))

There is a new requirement for issuers to ensure that annual financial reports and halfyearly financial reports remain publicly available for at least five years.

(c) Responsibility statements (Regulations 4(3)(c) and 6(3)(c))

There is a new requirement for issuers to include a responsibility statement in their annual and half-yearly reports. Regulation 8(5)(d) clarifies that the 'true and fair' view to be expressed in the responsibility statements for half-yearly reports is satisfied by including a statement that the condensed...

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