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While having shareholding disclosure is a globally accepted safeguard that national regulators agree needs to be a part of an effective market oversight program, the agreement that this is necessary is where it ends. Since there is no global framework in place, each jurisdiction has its own thresholds at which reporting shareholding disclosure is required.
This means firms must not only know which jurisdiction a company is subject to reporting requirements but also have access to current threshold and shares outstanding data across all relevant jurisdictions. Understanding global compliance to this degree, and achieving it efficiently and easily, is a challenge that many firms both large and small face today.
For example, if you are purchasing shares of Komercni Banka on the Prague stock exchange, acquisition of a position representing one percent of voting shares, or just over 1.9 million shares, will trigger the shareholding disclosure obligation. Meanwhile, if you are investing in Royal Bank of Canada on the Toronto Stock Exchange, you would need to amass a position of approximately 140 million shares before you are obligated to file with the Canadian authorities.
Compounding the complexity is that the type and nature of shares on which the calculation is based also differs between jurisdictions. Investors in United States companies are required to make their reporting determination based on the number of shares that they are holding of a specific asset class. So, although a holder of Alphabet Inc. Class C shares holds no voting rights in the company, a five percent holding of those Class C shares still represent a reportable position. This is counter to most other jurisdictions, which base their reporting requirements off the number of voting shares that are held. As a result, it’s vital to understand the total voting rights outstanding for a company and how many are assigned to each share that is held.
Finally, a thorough and accurate understanding of shares outstanding is required to perform the necessary calculations. While some jurisdictions, notably many European ones, prescribe fixed thresholds at which reporting must be done, others rely on the concept of a relative threshold once a certain threshold is crossed. For example, an investor acquiring a reportable position in BHP Group Ltd would need to file documentation with the Australian authorities when they cross the five percent threshold, and all future changes in the position of more than one percent in either direction would trigger new filing obligations. Essentially, firms need to have a comprehensive understanding of their previous filing level and how their current position relates to that point.
Complying with shareholding disclosure requirements is a very data intensive exercise. Firms must understand the current threshold requirements in each jurisdiction in which they trade, aggregate firm positions and current shares outstanding, then combine all these data points to perform timely, accurate monitoring—a process that firms of all sizes can find challenging.
How can Bloomberg help?
To help clients streamline and keep tabs on various shareholding disclosure requirements, Bloomberg provides a comprehensive Shareholding Disclosure Data Solution available for enterprise-wide use.
This solution delivers multiple indicators to help clients monitor and report shareholding disclosure and reveals various ownership thresholds. Key data fields include primary jurisdiction, share type, web links to the relevant regulation, reporting threshold shares and percentages. This solution also provides foundational reference data including country, exchange, and a unique identifier such as a Financial Instrument Global Identifier (FIGI). Shares outstanding figures and other information including voting shares and listing changes are monitored in real-time and updated in a timely manner by Bloomberg’s Enterprise Regulatory and Accounting Product team. This global team of regulatory experts monitors various jurisdictional requirements and uses this data along with available company data to produce relevant indicators that can help firms to implement compliant strategies without the need to independently source all of the various required data points.
To learn more about Bloomberg’s Shareholding Disclosure Data Solution, click here.
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