The Bank of Italy recently opened a public consultation on certain regulatory provisions to be enacted in order to bring forward the implementation of the EU Markets in Financial Instruments Directive and the EU Markets in Financial Instruments Regulation. The proposed provisions aim to supplement the Italian legal framework regarding the organisational duties of regulated intermediaries that provide investment services and activities, including banks.
Cabinet recently submitted a bill to the 198th session of the Diet to amend, among other acts, the Financial Instruments and Exchange Act and the Payment Services Act. Among other things, the amendments introduce new regulations for security-type digital tokens (ie, initial coin offerings and security token offerings) and clarify that digital tokens issued in consideration for crypto assets will be regarded as deemed securities.
If a securities registration statement contains a material misstatement, investors that acquire securities through the relevant offering can hold the issuing company liable for related damages. However, it is unclear what level of damages is recoverable if the issuing company successfully proves that the loss incurred by the investor is at least partly attributable to an unrelated factor or circumstance. A recent Supreme Court judgment has provided some clarity in this regard.
The Kyoto District Court recently ruled in favour of a shareholder's petition that a listed issuer cease an offering of its new shares by third-party allotment on the grounds that the offering had been conducted through an 'extremely unfair method', despite having been approved by a resolution at the issuer's shareholders' meeting. The court adopted the main purpose rule in accordance with prior court rulings and concluded that the share offering's main purpose had been to reduce the petitioning shareholder's shareholding.
Foreign private issuers' bonds that are listed on a Japanese securities exchange, such as the Tokyo Pro-Bond Market (TPBM), are subject to both the insider trading rules and the fair disclosure rules under Japanese law, while non-listed bonds (so-called 'Samurai bonds') are not. This article provides a brief explanation of the rules that apply to offerings of Samurai bonds and bonds listed on the TPBM under Japanese securities law.
The newly introduced fair disclosure rule enacted under Japan's securities laws and regulation regime is most often considered to apply to issuers of listed shares. However, based on the clear wording of the rule, it is also applicable to issuers whose only listed securities are bonds. Although the majority of bonds issued in the Japanese market are unlisted, there is a market dedicated to listed bonds in Japan: the Tokyo Pro-Bond Market.
The new Markets in Financial Instruments (MiFID) Act, which transposes the Markets in Financial Instruments Directive and implements the EU Markets in Financial Instruments Regulation, was recently voted into law. Most issues relating to markets in financial instruments are covered by the first part of the act, while the provision of investment services will continue to be governed by the Financial Sector Act, as amended by the second part of the MiFID Act.
Following the adoption of Bill of Law 7022, the new Act on Market Abuse recently entered into force. The act significantly increases the administrative and criminal penalties for infringements of market abuse provisions and designates the Luxembourg financial sector regulator as the competent authority for the purposes of the EU Market Abuse Regulation. It also extends the definition of 'regulated information' provided for in the Act on Transparency Requirements for Issuers.
The Luxembourg Stock Exchange (LuxSE) recently introduced a new specific platform for green financial instruments: the Luxembourg Green Exchange (LGX). Although joining the LGX is optional and green securities can be listed on the LuxSE and recognised as green regardless of whether the issuer chooses to join the LGX, having securities admitted to the LGX will increase investor confidence as to their green nature.
The EU Market Abuse Regulation recently came into force in Luxembourg and a new market abuse regime affecting listed companies has been implemented. In addition, a wider set of rules covering the disclosure of inside information, insider list manager transactions and modifications relating to multilateral trading facility (MTF) platforms – including the Luxembourg Euro MTF market – have been introduced.
Updated Luxembourg Stock Exchange (LuxSE) rules and regulations came into force in January 2016 and the LuxSE recently published frequently asked questions (FAQs) regarding the Euro MTF Market rules. The FAQs include information on approvals and the requirements for the different types of security generally issued. They also provide support to practitioners in regards to prospectus approvals and the Euro MTF market listing process.
The stock market's flexibility is its greatest selling point for publicly traded companies, as it allows a fast flow of capital while still enabling majority shareholders to implement fundamental corporate changes should they wish to exit the market. However, even with all of this flexibility, shares may not always be free of other encumbrances, and the sale of such shares may be opposed by interested parties or even refused to be recognised as a genuine sale by the Trade Registry.
The Federal Department of Finance recently announced that it was activating the measures adopted by the Swiss Federal Council to protect the Swiss stock exchange infrastructure in anticipation of the expiration of the stock market equivalence granted by the European Commission. Notably, the protective measures do not affect companies with registered offices in Switzerland that are listed and traded exclusively on exchanges outside Switzerland.
If everything goes according to plan, on 1 January 2020 Switzerland will have successfully overhauled its financial market legislation with the entry into force of the Financial Services Act and the Financial Institutions Act. An important element of the overhaul is the introduction of a new comprehensive and harmonised prospectus regime. However, the question remains as to whether non-public offerings as a species will survive in Switzerland.
In order to facilitate EU investment firms' access to trade Swiss shares on Swiss stock exchanges and limit the potential negative impact on the Swiss stock exchange infrastructure once Switzerland loses EU third-country equivalence, the Federal Council recently enacted emergency measures that will take effect from 1 January 2019. Any wilful or negligent breach of the recognition requirement under the new ordinance may result in criminal penalties against foreign trading venues and their responsible bodies.
The Disclosure Office of the SIX Exchange Regulation recently published useful guidance on its practice relating to certain provisions in the recently enacted Financial Market Infrastructure Act and the related implementing ordinance (the Swiss Financial Markets Supervisory Authority Financial Market Infrastructure Ordinance). The entry into force of the two federal laws has resulted in substantive amendments to some of the disclosure office's notices.
As in other jurisdictions, under Swiss law there are specific requirements relating to the disclosure of shareholdings and the actions of shareholders for companies whose equity securities are listed in whole or in part in Switzerland, including on Switzerland's main stock exchange, the SIX Swiss Exchange Ltd. This update aims to revisit and provide some practical guidance on certain shareholder disclosure duties in the context of Swiss rights offerings.