Exemption of Swiss issuers whose home ­state is Germany from publication obligations ­under the German Securities Trading Act

For the first time, the German Federal Financial Supervisory Authority (Bundes­anstalt für Finanz­dienstleistungsaufsicht, “BaFin”) has granted an exemption from the publication obligations under Sec. 40 of the German Securities Trading Act (Wertpapierhandelsgesetz, “WpHG”) to a Swiss issuer whose shares are listed on a German stock ­exchange and whose home state within the meaning of Sec. 2 (13) WpHG is the Federal Republic of Germany. This is the first time ever that an exemption has been granted under Sec. 46 WpHG.

Domestic issuers are legally obliged to publish certain voting rights notifications and to notify them to the company register and to BaFin. “Domestic issuers” within the meaning of Sec. 2 (14) WpHG are issuers whose home state within the meaning of Sec. 2 (13) WpHG is either 

  • the Federal Republic of Germany, and whose securities are listed on a German Stock exchange, or
  • another Member State of the European Union or a state party to the Agreement on the European Economic Area, but whose securities are listed only on a German stock exchange.

 
In accordance with Sec. 40 WpHG, domestic issuers must publish information when voting rights have reached, exceeded or fallen below the thresholds specified for shares (Sec. 33 WpHG), for instruments granting the holder the right to acquire shares (Sec. 38 WpHG) and for the aggregate total of shares and the aforementioned instruments (Sec. 39 WpHG). In accordance with Sec. 41 WpHG, if the aggregate number of the domestic issuer’s voting rights has increased or decreased, the issuer must publish the aggregate number of voting rights as well as the effective date of the change in the aggregate number of voting rights. In accordance with Sec. 46 (1) WpHG, BaFin may exempt domestic issuers domiciled in a non-Member State from the publication obligations set forth in Secs. 40 and 41 WpHG if such issuers are subject to equivalent rules of a non-Member State or if they subjected themselves to such rules.

In its comparative analysis, BaFin has found that the rules governing voting rights notifications under the Swiss Financial Market Infrastructure Act and the Swiss Financial Market Infrastructure Ordinance (FINMA) are equivalent to the provisions of Secs. 33 et seqq. WpHG. BaFin is, however, of the view that the comparability test is not met with regard to the publication of increases or decreases in the aggregate number of the issuer’s voting rights under Sec. 41 WpHG due to the absence of a sovereign legal act under Swiss law to that effect.

By granting the exemption, BaFin has set a legal precedent for all Swiss issuers qualifying as “domestic issuers” within the meaning of Sec. 2 (14) WpHG. Since BaFin has performed an abstract comparative analysis of the German and Swiss rules governing voting rights notifications, all Swiss issuers qualifying as domestic issuers may claim an exemption from the publication obligations under Sec. 40 WpHG.

It is true that exempted issuers domiciled in a non-Member State still remain obliged to publish in Germany and notify to the company register in Germany the voting rights notifications to be published under the laws of their home state. The exemption nevertheless offers a major practical advantage in that the issuers only need to make those publications in Germany that are required under the laws of their home state. The publication obligations under Sec. 40 WpHG are not applicable to these issuers.

» Download Newsletter (PDF)