BETA


2007/2239(INL) Transparency of institutional investors

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead JURI LEHNE Klaus-Heiner (icon: PPE-DE PPE-DE)
Committee Opinion ECON BOWLES Sharon (icon: ALDE ALDE)
Lead committee dossier:
Legal Basis:
RoP 47

Events

2009/01/29
   EC - Commission response to text adopted in plenary
Documents
2008/10/17
   EC - Commission response to text adopted in plenary
Documents
2008/09/23
   EP - Results of vote in Parliament
2008/09/23
   EP - Decision by Parliament
Details

The European Parliament adopted by 513 votes to 43, with 117 abstentions, a resolution with recommendations to the Commission on transparency of institutional investors.

The own initiative report had been tabled for consideration in plenary by Klaus-Heiner LEHNE (EPP-ED, DE) on behalf of the Committee on Legal Affairs.

The Parliament calls on the European Commission to submit, on the basis of Articles 44, 47(2) or 95 of the EC Treaty, depending on the subject matter, a legislative proposal or proposals on the transparency of hedge funds and private equity . At the same time, it calls on the Commission to encourage improvements in transparency by supporting and monitoring the evolution of self-regulation already introduced by managers of hedge funds and private equity and their counterparties, and to encourage Member States to support these efforts through dialogue and exchange of best practice.

MEPs call for such proposal(s) to be drawn up on the basis of interinstitutional discussions and following the following main recommendations:

Hedge funds and private equity : the Commission is called upon to submit the appropriate legislative proposals by way of review of the existing acquis communautaire affecting the various types of investors and counterparties. MEPs also call on the Commission to explore the possibility of differentiating between hedge funds, private equity and other investors and to adapt or establish rules providing for the clear disclosure and timely communication of relevant and material information so as to facilitate high-quality decision-making and transparent communication between investors and the company management as well as between investors and other counterparties. Furthermore, the resolution calls on the Commission to explore ways of enhancing the visibility and understanding of risk, as distinct from creditworthiness.

According to MEPs, hedge funds and private equity should be obliged to disclose and explain – vis-à-vis the companies whose shares they acquire or own, retail and institutional investors, prime brokers and supervisors – their investment policy and associated risks.

With a view to the above-mentioned legislative proposals, the Commission should in particular:

explore the possibility of contract terms, to be applied to alternative investments, that provide for an unambiguous disclosure and management of risk, for measures to be taken in the event of thresholds being exceeded, for a clear description of lock-up periods and for explicit conditions governing cancellation and termination of the contract; investigate the issue of money laundering; explore possibilities of harmonising rules and recommendations for hedge funds and – as the case may be – private equity to register and identify shareholders beyond a certain proportion, as well as to disclose their strategies and intentions; establish, together with the industry, a code of best practice on how to rebalance the current structure of corporate governance; establish rules providing for full transparency of managers" remuneration systems, including stock options, through formal approval by the general meeting of the company's shareholders.

Hedge funds : the Commission is called upon to establish rules that enhance the transparency of voting policies of hedge funds, on the basis that the addressees of Community rules should be the managers of such funds. Such rules could also include a system of EU-wide shareholder identification.

Private equity : the European Parliament asks the Commission to propose rules that forbid investors to "plunder" companies (so called "asset stripping") and thus misuse their financial power in a way that merely disadvantages the company acquired in the long term, without having any positive impact on the company's future and the interest of its employees, creditors and business partners. Moreover, the Commission should explore common rules to guarantee the capital maintenance of companies.

Furthermore, the Commission should examine ways of addressing the issues arising when banks lend huge amounts of money to acquirers, including private equity, and then disclaim any responsibility whatsoever as to the purpose for which that money is used or the provenance of the money used to repay the loan.

Documents
2008/09/23
   EP - End of procedure in Parliament
2008/09/22
   EP - Debate in Parliament
2008/07/09
   EP - Committee report tabled for plenary, single reading
Documents
2008/07/09
   EP - Committee report tabled for plenary
Documents
2008/06/26
   EP - Vote in committee
Details

The Committee on Legal Affairs adopted an own initiative report by Klaus-Heiner LEHNE (EPP-ED, DE) with recommendations to the Commission on transparency of institutional investors.

MEPs call on the European Commission to submit to Parliament, on the basis of Articles 44, 47(2) or 95 of the EC Treaty, depending on the subject matter, a legislative proposal or proposals on the transparency of hedge funds and private equity. At the same time, they call on the Commission to encourage improvements in transparency by supporting and monitoring the evolution of self-regulation already introduced by managers of hedge funds and private equity and their counterparties, and to encourage Member States to support these efforts through dialogue and exchange of best practice.

MEPs call for such proposal(s) to be drawn up in the light of interinstitutional discussions and following the detailed recommendations below:

Hedge funds and private equity : the Commission is called upon to submit the appropriate legislative proposals by way of review of the existing acquis communautaire affecting the various types of investors and counterparties. MEPs also call on the Commission to explore the possibility of differentiating between hedge funds, private equity and other investors and to adapt or establish rules providing for the clear disclosure and timely communication of relevant and material information so as to facilitate high-quality decision-making and transparent communication between investors and the company management as well as between investors and other counterparties.

The new legislation should require shareholders to notify issuers of the proportion of their voting rights resulting from an acquisition or disposal of shares where that proportion reaches, exceeds or falls below the specific thresholds starting with 3% instead of 5%, as mentioned in Directive 2004/109/EC. It should also oblige hedge funds and private equity, as far as those categories of investors can be differentiated from others, to disclose and explain – vis-à-vis the companies whose shares they acquire or own, retail and institutional investors, prime brokers and supervisors – their investment policy and associated risks.

With a view to the above-mentioned legislative proposals, the Commission should in particular:

explore the possibility of contract terms, to be applied to alternative investments, that provide for an unambiguous disclosure and management of risk, for measures to be taken in the event of thresholds being exceeded, for a clear description of lock-up periods and for explicit conditions governing cancellation and termination of the contract; investigate the issue of money laundering; explore possibilities of harmonising rules for registering and identifying shareholders beyond a certain proportion, as well as for disclosing their strategies and intentions; establish, together with the industry, a code of best practice on how to rebalance the current structure of corporate governance; establish rules providing for full transparency of managers’ remuneration systems, including stock options, through formal approval by the general meeting of the company’s shareholders.

Hedge funds : the Commission is called upon to establish rules that enhance the transparency of voting policies of hedge funds, on the basis that the addressees of Community rules should be the managers of such funds. Such rules could also include a system of EU-wide shareholder identification. Where proposals already exist, they should be implemented accordingly.

Private equity : the Commission is called upon to propose rules that forbid investors to “plunder” companies (so called “asset stripping”) and thus misuse their financial power in a way that merely disadvantages the company acquired in the long term, without having any positive impact on the company’s future and the interest of its employees, creditors and business partners. MEPs also propose common rules to guarantee the capital maintenance of companies.

Furthermore, the Commission should examine ways of addressing the issues arising when banks lend huge amounts of money to acquirers, including private equity, and then disclaim any responsibility whatsoever as to the purpose for which that money is used or the provenance of the money used to repay the loan.

2008/05/28
   EP - Committee opinion
Documents
2008/05/08
   EP - Amendments tabled in committee
Documents
2008/04/01
   EP - Committee draft report
Documents
2007/12/11
   EP - BOWLES Sharon (ALDE) appointed as rapporteur in ECON
2007/11/19
   EP - LEHNE Klaus-Heiner (PPE-DE) appointed as rapporteur in JURI
2007/11/15
   EP - Committee referral announced in Parliament
2007/11/15
   EP - Referral to associated committees announced in Parliament

Documents

Activities

Votes

Rapport Lehne A6-0296/2008 - résolution #

2008/09/23 Outcome: +: 513, 0: 117, -: 43
DE FR IT ES PL RO NL HU PT BE AT EL SE IE SK CZ BG LV FI DK LT SI MT LU EE CY GB
Total
87
66
61
48
45
31
26
20
20
20
16
21
18
11
10
23
14
9
14
14
12
7
5
6
6
5
58
icon: PPE-DE PPE-DE
254

Ireland PPE-DE

3

Denmark PPE-DE

1

Lithuania PPE-DE

1

Malta PPE-DE

2

Luxembourg PPE-DE

3

Estonia PPE-DE

For (1)

1

Cyprus PPE-DE

2
icon: PSE PSE
167

Ireland PSE

1

Slovakia PSE

2

Czechia PSE

For (1)

1

Lithuania PSE

2

Slovenia PSE

For (1)

1

Luxembourg PSE

For (1)

1

Estonia PSE

3
icon: Verts/ALE Verts/ALE
42

Italy Verts/ALE

2

Romania Verts/ALE

1

Belgium Verts/ALE

2

Austria Verts/ALE

Against (1)

2

Sweden Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Finland Verts/ALE

For (1)

1

Denmark Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

United Kingdom Verts/ALE

5
icon: UEN UEN
39

Denmark UEN

For (1)

1

Lithuania UEN

2
icon: NI NI
26
2

Austria NI

2

Czechia NI

1
icon: ALDE ALDE
87

Spain ALDE

1

Hungary ALDE

Abstain (1)

1

Belgium ALDE

For (1)

4

Sweden ALDE

Abstain (2)

2

Ireland ALDE

Abstain (1)

1

Latvia ALDE

1

Slovenia ALDE

2

Luxembourg ALDE

Abstain (1)

1

Estonia ALDE

Abstain (2)

2

Cyprus ALDE

Abstain (1)

1
icon: GUE/NGL GUE/NGL
39

Spain GUE/NGL

Abstain (1)

1

Netherlands GUE/NGL

2

Portugal GUE/NGL

3

Sweden GUE/NGL

2

Ireland GUE/NGL

1

Finland GUE/NGL

For (1)

1

Denmark GUE/NGL

1

Cyprus GUE/NGL

2
icon: IND/DEM IND/DEM
19

Poland IND/DEM

3

Netherlands IND/DEM

2

Sweden IND/DEM

2

Ireland IND/DEM

For (1)

1

Czechia IND/DEM

Against (1)

1

Denmark IND/DEM

Abstain (1)

1

History

(these mark the time of scraping, not the official date of the change)

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  • date: 2008-05-08T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE405.821 title: PE405.821 type: Amendments tabled in committee body: EP
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  • date: 2007-11-15T00:00:00 type: Referral to associated committees announced in Parliament body: EP
  • date: 2008-06-26T00:00:00 type: Vote in committee, 1st reading/single reading body: EP summary: The Committee on Legal Affairs adopted an own initiative report by Klaus-Heiner LEHNE (EPP-ED, DE) with recommendations to the Commission on transparency of institutional investors. MEPs call on the European Commission to submit to Parliament, on the basis of Articles 44, 47(2) or 95 of the EC Treaty, depending on the subject matter, a legislative proposal or proposals on the transparency of hedge funds and private equity. At the same time, they call on the Commission to encourage improvements in transparency by supporting and monitoring the evolution of self-regulation already introduced by managers of hedge funds and private equity and their counterparties, and to encourage Member States to support these efforts through dialogue and exchange of best practice. MEPs call for such proposal(s) to be drawn up in the light of interinstitutional discussions and following the detailed recommendations below: Hedge funds and private equity : the Commission is called upon to submit the appropriate legislative proposals by way of review of the existing acquis communautaire affecting the various types of investors and counterparties. MEPs also call on the Commission to explore the possibility of differentiating between hedge funds, private equity and other investors and to adapt or establish rules providing for the clear disclosure and timely communication of relevant and material information so as to facilitate high-quality decision-making and transparent communication between investors and the company management as well as between investors and other counterparties. The new legislation should require shareholders to notify issuers of the proportion of their voting rights resulting from an acquisition or disposal of shares where that proportion reaches, exceeds or falls below the specific thresholds starting with 3% instead of 5%, as mentioned in Directive 2004/109/EC. It should also oblige hedge funds and private equity, as far as those categories of investors can be differentiated from others, to disclose and explain – vis-à-vis the companies whose shares they acquire or own, retail and institutional investors, prime brokers and supervisors – their investment policy and associated risks. With a view to the above-mentioned legislative proposals, the Commission should in particular: explore the possibility of contract terms, to be applied to alternative investments, that provide for an unambiguous disclosure and management of risk, for measures to be taken in the event of thresholds being exceeded, for a clear description of lock-up periods and for explicit conditions governing cancellation and termination of the contract; investigate the issue of money laundering; explore possibilities of harmonising rules for registering and identifying shareholders beyond a certain proportion, as well as for disclosing their strategies and intentions; establish, together with the industry, a code of best practice on how to rebalance the current structure of corporate governance; establish rules providing for full transparency of managers’ remuneration systems, including stock options, through formal approval by the general meeting of the company’s shareholders. Hedge funds : the Commission is called upon to establish rules that enhance the transparency of voting policies of hedge funds, on the basis that the addressees of Community rules should be the managers of such funds. Such rules could also include a system of EU-wide shareholder identification. Where proposals already exist, they should be implemented accordingly. Private equity : the Commission is called upon to propose rules that forbid investors to “plunder” companies (so called “asset stripping”) and thus misuse their financial power in a way that merely disadvantages the company acquired in the long term, without having any positive impact on the company’s future and the interest of its employees, creditors and business partners. MEPs also propose common rules to guarantee the capital maintenance of companies. Furthermore, the Commission should examine ways of addressing the issues arising when banks lend huge amounts of money to acquirers, including private equity, and then disclaim any responsibility whatsoever as to the purpose for which that money is used or the provenance of the money used to repay the loan.
  • date: 2008-07-09T00:00:00 type: Committee report tabled for plenary, single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A6-2008-296&language=EN title: A6-0296/2008
  • date: 2008-09-22T00:00:00 type: Debate in Parliament body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?secondRef=TOC&language=EN&reference=20080922&type=CRE title: Debate in Parliament
  • date: 2008-09-23T00:00:00 type: Results of vote in Parliament body: EP docs: url: https://oeil.secure.europarl.europa.eu/oeil/popups/sda.do?id=15343&l=en title: Results of vote in Parliament
  • date: 2008-09-23T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P6-TA-2008-426 title: T6-0426/2008 summary: The European Parliament adopted by 513 votes to 43, with 117 abstentions, a resolution with recommendations to the Commission on transparency of institutional investors. The own initiative report had been tabled for consideration in plenary by Klaus-Heiner LEHNE (EPP-ED, DE) on behalf of the Committee on Legal Affairs. The Parliament calls on the European Commission to submit, on the basis of Articles 44, 47(2) or 95 of the EC Treaty, depending on the subject matter, a legislative proposal or proposals on the transparency of hedge funds and private equity . At the same time, it calls on the Commission to encourage improvements in transparency by supporting and monitoring the evolution of self-regulation already introduced by managers of hedge funds and private equity and their counterparties, and to encourage Member States to support these efforts through dialogue and exchange of best practice. MEPs call for such proposal(s) to be drawn up on the basis of interinstitutional discussions and following the following main recommendations: Hedge funds and private equity : the Commission is called upon to submit the appropriate legislative proposals by way of review of the existing acquis communautaire affecting the various types of investors and counterparties. MEPs also call on the Commission to explore the possibility of differentiating between hedge funds, private equity and other investors and to adapt or establish rules providing for the clear disclosure and timely communication of relevant and material information so as to facilitate high-quality decision-making and transparent communication between investors and the company management as well as between investors and other counterparties. Furthermore, the resolution calls on the Commission to explore ways of enhancing the visibility and understanding of risk, as distinct from creditworthiness. According to MEPs, hedge funds and private equity should be obliged to disclose and explain – vis-à-vis the companies whose shares they acquire or own, retail and institutional investors, prime brokers and supervisors – their investment policy and associated risks. With a view to the above-mentioned legislative proposals, the Commission should in particular: explore the possibility of contract terms, to be applied to alternative investments, that provide for an unambiguous disclosure and management of risk, for measures to be taken in the event of thresholds being exceeded, for a clear description of lock-up periods and for explicit conditions governing cancellation and termination of the contract; investigate the issue of money laundering; explore possibilities of harmonising rules and recommendations for hedge funds and – as the case may be – private equity to register and identify shareholders beyond a certain proportion, as well as to disclose their strategies and intentions; establish, together with the industry, a code of best practice on how to rebalance the current structure of corporate governance; establish rules providing for full transparency of managers" remuneration systems, including stock options, through formal approval by the general meeting of the company's shareholders. Hedge funds : the Commission is called upon to establish rules that enhance the transparency of voting policies of hedge funds, on the basis that the addressees of Community rules should be the managers of such funds. Such rules could also include a system of EU-wide shareholder identification. Private equity : the European Parliament asks the Commission to propose rules that forbid investors to "plunder" companies (so called "asset stripping") and thus misuse their financial power in a way that merely disadvantages the company acquired in the long term, without having any positive impact on the company's future and the interest of its employees, creditors and business partners. Moreover, the Commission should explore common rules to guarantee the capital maintenance of companies. Furthermore, the Commission should examine ways of addressing the issues arising when banks lend huge amounts of money to acquirers, including private equity, and then disclaim any responsibility whatsoever as to the purpose for which that money is used or the provenance of the money used to repay the loan.
  • date: 2008-09-23T00:00:00 type: End of procedure in Parliament body: EP
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New
  • JURI/6/55879
procedure/legal_basis/0
Rules of Procedure EP 046
procedure/legal_basis/0
Rules of Procedure of the European Parliament EP 046
procedure/subject
Old
  • 2.50.03 Securities and financial markets, stock exchange, CIUTS, investments
New
2.50.03
Securities and financial markets, stock exchange, CIUTS, investments
other/0/dg/title
Old
Secretariat General
New
Secretariat-General
activities
  • date: 2007-11-15T00:00:00 body: EP type: Committee referral announced in Parliament, 1st reading/single reading committees: body: EP responsible: False committee: ECON date: 2007-12-11T00:00:00 committee_full: Economic and Monetary Affairs (Associated committee) rapporteur: group: ALDE name: BOWLES Sharon body: EP responsible: True committee: JURI date: 2007-11-19T00:00:00 committee_full: Legal Affairs (Associated committee) rapporteur: group: PPE-DE name: LEHNE Klaus-Heiner
  • date: 2008-06-26T00:00:00 body: EP committees: body: EP responsible: False committee: ECON date: 2007-12-11T00:00:00 committee_full: Economic and Monetary Affairs (Associated committee) rapporteur: group: ALDE name: BOWLES Sharon body: EP responsible: True committee: JURI date: 2007-11-19T00:00:00 committee_full: Legal Affairs (Associated committee) rapporteur: group: PPE-DE name: LEHNE Klaus-Heiner type: Vote in committee, 1st reading/single reading
  • date: 2008-07-09T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A6-2008-296&language=EN type: Committee report tabled for plenary, single reading title: A6-0296/2008 body: EP type: Committee report tabled for plenary, single reading
  • date: 2008-09-22T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?secondRef=TOC&language=EN&reference=20080922&type=CRE type: Debate in Parliament title: Debate in Parliament body: EP type: Debate in Parliament
  • date: 2008-09-23T00:00:00 docs: url: http://www.europarl.europa.eu/oeil/popups/sda.do?id=15343&l=en type: Results of vote in Parliament title: Results of vote in Parliament url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P6-TA-2008-426 type: Decision by Parliament, 1st reading/single reading title: T6-0426/2008 body: EP type: Results of vote in Parliament
committees
  • body: EP responsible: False committee: ECON date: 2007-12-11T00:00:00 committee_full: Economic and Monetary Affairs (Associated committee) rapporteur: group: ALDE name: BOWLES Sharon
  • body: EP responsible: True committee: JURI date: 2007-11-19T00:00:00 committee_full: Legal Affairs (Associated committee) rapporteur: group: PPE-DE name: LEHNE Klaus-Heiner
links
other
  • body: EC dg: url: http://ec.europa.eu/dgs/secretariat_general/index_en.htm title: Secretariat General commissioner: KALLAS Siim
procedure
dossier_of_the_committee
JURI/6/55879
reference
2007/2239(INL)
title
Transparency of institutional investors
legal_basis
Rules of Procedure of the European Parliament EP 046
stage_reached
Procedure completed
subtype
Request for legislative proposal
type
INL - Legislative initiative procedure
subject
2.50.03 Securities and financial markets, stock exchange, CIUTS, investments