Joan Burton (Dublin West, Labour)
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Question 147: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the details of the notification requirements to the Irish Stock Exchange of significant shareholdings; the powers and responsibilities of the Financial Regulator and stock exchange to ensure that such notification occurs; if there is a mechanism or necessity for a mechanism whereby proactive measures are undertaken to ensure compliance with notification requirements; if she will define the meaning of a controlling interest for the purposes of such notification; if her attention has been drawn to breaches of these notification requirements in either 2007 or 2008; the sanctions possible when there is a failure to notify; and if she will make a statement on the matter. [40793/08]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The Transparency Directive (2004/109/EC), inter alia, establishes EU-wide requirements in relation to the disclosure of major shareholdings by investors in respect of issuers whose securities are already admitted to trading on a regulated market. This Directive replaced the EU legislation that had applied prior to the adoption of the new measure. The Directive was transposed into Irish law on 13 June 2007 by means of the Transparency (Directive 2004/109/EC) Regulations 2007 (S.I. No. 277 of 2007) and Part 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006. The implementing legislation allows the competent authority to make additional rules, as necessary, to enable it to ensure effective compliance with the provisions of the new law.

In accordance with Article 24 of the Directive the Financial Regulator was designated in Part 8 of the Regulations as the central administrative competent authority with responsibility for ensuring that the disclosure provisions in the Regulations are applied. Under Part 8 of the Regulations the Financial Regulator has delegated certain tasks to the Irish Stock Exchange. However, the Financial Regulator retains overall responsibility for ensuring compliance.

Under the 2007 Regulations, notification to the Irish Stock Exchange is required when a person's shareholding in an issuer company that is admitted to trading on a regulated market reaches or crosses certain percentage thresholds. The relevant threshold for Irish issuers is 3%, and each 1% thereafter, up to 100%. An option was available to Member States to have a threshold lower than the 5% required by the Directive and Ireland chose to set 3% as the threshold in the interest of increased transparency.

A person making a notification to an issuer is obliged at the same time to file a copy of the notification electronically with the Irish Stock Exchange. Upon receipt of the notification the issuer must make public all the information contained in the notification. The notification requirement applies only to shares with voting rights attached.

Under Regulations 39 and 40 of the 2007 Regulations, the Financial Regulator has power to monitor whether issuers disclose timely information and to take appropriate action if that is not the case. The Regulator can also make public the fact that an issuer or shareholder or other person as set out in the Regulations is failing to comply with his or her obligations. The Financial Regulator has not brought breaches of notification requirements in 2007 or 2008 to my attention.

Breaches of notification requirements are investigated, in the first instance, by the Irish Stock Exchange, which the Financial Regulator has appointed as its delegate in this regard. Regulation 67 of the Regulations sets out the sanctions that may be imposed for a contravention of the notification requirements. These include public caution or reprimand and monetary penalties up to a maximum of €2.5 million.

Notification of major shareholdings in respect of issuers admitted to trading on markets other than regulated markets, such as the Irish Enterprise Exchange (IEX) of the Irish Stock Exchange, continues to be governed by Part IV of the Companies Act 1990 which applied to all issuers prior to the implementation of the Transparency Regulations. Consideration is being given to extending the Regulations to these issuers.