LONDON, February 15, 2011 /PRNewswire/ --
- How a "Company Initiated" Request Will Solve the Problem
Too many public companies in much of Europe struggle to identify who owns, votes or influences their shares. Public disclosures made by institutional investors are not only ineffective; they can misinform the market. The current system also jeopardises the governance objective of increasing engagement between companies and their investors.
Today, Capital Precision, the market intelligence service and a member of King Worldwide, launches its White Paper Seeing More Clearly: Ownership Disclosures Are Not Fit For Purpose. The White Paper argues that inconsistencies in national European reporting regulations, with different thresholds, different timeframes, and different levels of transparency for derivatives, show that one-size-fit-all rules are simply not up to the task. It provides evidence of a two-speed market for companies; those who have the right to demand the identity of their shareholders, and those who do not. This is unfair, and risks creating a false market in the latter companies' shares.
"Companies need to know who owns their shares", says Mark Simms, CEO of Capital Precision. "Without this information, engaging investors - as well as targeting new sources of capital - is made extremely difficult; as does providing accurate information to investors during a takeover or merger.
"What is needed, Capital Precision asserts, is a company or 'Issuer Initiated Enquiry'; a pan European legal right for companies to require reporting of the chain of ownership. At present, this is available in selected member states such as the UK and France, but not all, so creating a two-speed market. The Issuer Initiated Enquiry would allow a company listed on a regulated exchange in the EU to issue a notice requiring an investor it knows, or believes, has an interest in its shares to confirm that fact. It would also allow the company to pursue information through a chain of nominees by requiring that each link in the chain disclose the person for whom they are acting.
"The Issuer Initiated Enquiry would ensure a proportionate solution that wouldn't flood the market with unnecessary disclosures, or require new expensive processes for investors," Simms concludes.
A copy of the White Paper is available at http://www.capitalprecision.com
About Capital Precision Ltd
- Capital Precision provides capital markets intelligence to over 200 of the world's largest companies and their advisors. Specialising in global shareholder analysis, global bondholder analysis, stress testing, institutional targeting and fund tracking, the company's unique and innovative skills are commissioned for both investor relations programs and corporate transactions. - Capital Precision is a member of the King Worldwide Group of Companies. These companies advise clients in the preparation and delivery of communications strategies covering all aspects of their business and stakeholder audience in today's global marketplace. - King Worldwide consultants bring together a deep experience of the changing media environment with an understanding of the diverse demands of different stakeholder groups from investors, customers, regulators and employees to commentators, analysts and pundits.
For further information: Mark Simms, CEO, Capital Precision email@example.com Mark Hynes, Consultant firstname.lastname@example.org Capital Precision +44(0)207-920-6900
SOURCE Capital Precision Ltd