Notification of major holdings
Who is subject to the obligation to notify major holdings?
The obligation to notify major shareholdings and proportions of voting rights applies to listed companies’ shareholders, persons comparable to a shareholder and the listed company itself.
The notification obligation concerns proportions of shareholdings and voting rights in a Finnish company whose shares are subject to trading on a regulated market in an EEA member state. The notification obligation begins from the admission of the share to public trading.
The purpose of the obligation is to provide investors with equal opportunities to have information on a listed company’s structure of ownership, voting rights and changes therein. This information may have a material influence on the value of the shares of the listed company.
The notification obligation is based on the provisions of chapter 9 of the Securities Markets Act on the notification of major holdings and voting rights.
The notification obligation always extends to the highest body exercising control in a control chain. A shareholder need not submit a notification of major shareholding if one is submitted by a person exercising control over the shareholder.
Shareholders or persons comparable to shareholders must notify the listed company and the FIN-FSA of changes in their holdings when their own holdings and/or the holdings of controlled entities exceed, fall below or reach the notification thresholds for voting rights or shares in the listed company.
Persons comparable to shareholders include persons who do not themselves own shares in the target company but exercise control over a shareholding company, as well as persons who are not themselves shareholders but who can exercise asset or managing rights conferred by shares, or who hold financial instruments giving rise to a notification obligation.
Listed companies themselves have an obligation to disclose a breach of notification thresholds due to the acquisition, disposal or annulment of their own shares.
The notification obligation also applies to unlisted series of shares.
The notification obligation does not apply to holdings and voting rights in companies traded in a multilateral trading facility, such as the First North list.
Which circumstances require a notification?
A notification is made whenever one’s proportion of holdings or votes in any listed company reaches, exceeds or falls below a disclosure threshold. The thresholds are 5%, 10%, 15%, 20%, 25%, 30%, 50%, 2/3 and 90% of the number of voting rights or shares in a company.
An obligation to disclose major holdings may arise on the grounds of
- Existing proportions of holdings and voting rights.
- A so-called long-position acquired through financial instruments1.
- The combined amount of items 1 and 2 above.
A notification obligation arises when any of the proportions specified in 1–3 above reaches, exceeds or falls below the notification threshold.
It may also arise without any specific measures taken by the shareholder. For example:
- Shareholdings are diluted due to an increase in the number of shares in a company as the result of a share issue.
- Proportional holdings increase due to the annulment of the target company's own shares or
- A long position in a financial instrument changes in response to a change in its so-called delta value.
A shareholder’s holdings and voting rights include holdings and voting rights of entities or foundations controlled by the shareholder and holdings and voting rights of pension foundations and funds of the shareholder or an entity controlled by the shareholder.
A notification of major holdings must be based on the total number of voting rights and total number of shares disclosed as by the listed company. The buy-back of shares by a listed company does not affect the obligation of a shareholder to notify major holdings. This is because the treasury shares held by the company are not deducted from the total number of shares. Only the annulment of repurchased shares reduces the total number of shares and has an impact on the proportions of voting rights and shareholdings.
When and how to make and publish a notification of major shareholdings?
A notification of major holdings must be made without undue delay, but no later than the next trading day after the shareholder has learned or should have learned of a transaction leading to the breach of a notification threshold.
Make the notification in writing on a notification form and send it to the listed company and the FIN-FSA to liputukset(at)finanssivalvonta.fi.
Complete the notification form in accordance with the instructions. Specify separately any existing proportions of holdings and voting rights, a long-position taken by financial instruments and their combined amount.
Submit the notification both to the listed company and the FIN-FSA. The notification submitted to the FIN-FSA should be sent to the registry office by e-mail, at liputukset(at)finanssivalvonta.fi.
The notification is published by the listed company:
- When a listed company receives a notification of major holdings, it must publish the information in the notification without undue delay.
- If a shareholder's notification is incomplete, the company may supplement it, provided that this does not cause any unreasonable delay or inconvenience. In such a case, however, the company should indicate the details it has added.
- If the listed company does not provide all the information required in the notification form, it should also mention this when disclosing the notification. Any other information provided in the notification must also be disclosed at the same time.
The FIN-FSA does not publish notifications of major shareholdings.
Notifications of major holdings can be searched by company in the Officially Appointed Mechanism for stock exchange releases.
Exceptions to the notification obligation
Regulations provide for exemptions to the notification obligation of fund management companies, credit institutions, investment service providers and market makers.
Chapter 9, section 8 and 8 a-c of the Securities Markets Act provide on exceptions concerning the obligation to notify, on the notification of the application of an exception and on exemptions.
Disclosure of holdings in listing companies
No notification obligation arises in respect of changes in holdings and voting rights occurring before the company’s share is admitted to trading on a regulated market.
The prospectus for a listing company identifies shareholders whose proportion of holdings or voting rights amounts to at least 5%. As a result of an initial public offering or sale, however, the information on company ownership changes. This means that there is no timely information on holdings in the market with which to compare subsequent notifications. Disclosing such details of the company’s shareholders in the form of a stock exchange release after the listing has been completed enhances investors’ access to information and sound securities markets practices.
Chapter 9 of the Securities Markets Act (in Finnish)
Examples of notification of major holdings (in Finnish) (pdf)
Notification of major holdings Q&A (in Finnish) (pdf)