CESR Proposals to Extend the Major Shareholding Notification Regime to Instruments of Similar Economic Effect

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In recent years, there has been increasing acceptance across the EU, that existing notification rules in relation to major shareholdings have become outdated and in need of amendment. Of particular concern, has been their inability to prevent parties from building up significant economic exposures in companies, primarily through derivative instruments, without having to disclose their interests. This was highlighted in October 2008, when Volkswagen AG (“Volkswagen”) temporarily became the highest valued company in the world as a result of Porsche SE (“Porsche,” which already held 42.6% of Volkswagen directly), discreetly building an additional 31.5% position in the company through options agreements. When Porsche finally disclosed its position to the market, the price of Volkswagen soared, making the German group worth more than the entire European motor industry combined.1

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