Disclosure Requirements - Croatia
Disclosure Category 2
Disclosure of a beneficial owner may be asked by issuers, the central bank and/or the regulator.
Investors that hold securities in the Croatian market are required to report if they exceed the set thresholds.
Consent
Clients are hereby deemed to consent to disclosure and to the appointment of the requestor (for example, but not limited to the issuer or its agent) as their attorney-in-fact, under power of attorney, to collect from CBL such information as is required to be disclosed. Clients not willing to give this consent cannot hold such securities and/or financial instruments in their account with CBL.
Disclosure requirements
Clients are advised that local laws and regulations may require Clearstream Banking to disclose holding information and details of beneficial ownership with respect to the Eligible Securities held with Clearstream Banking's securities account.
Background and legal basis
The basis for the disclosure obligation, which falls on the shareholder, derives from the Capital Market Act.
The Croatian Financial Services Supervisory Agency (HANFA), Croatian National Bank and other judicial supervisory and regulatory authorities also have the right, to the extent permitted by the applicable law, to request disclosure of shareholder information from Clearstream Banking. In such case, the securities held at CBL’s client account in SKDD would be disclosed to the requesting authorities.
Directive (EU) 2017/828 of 17 May 2017 amending Directive 2007/36/EC with regard the encouragement of long-term shareholder engagement (the second shareholder’s rights directive “SRD II”) has been transposed through the Act on Modifications and Amendments to the Companies Act (Official Gazette 40/19) on 20 April 2019 and 1 May 2020. Further provisions will enter into force on 1 January 2021 (“SDR II Law”).
Sanctions
The sanctions are determined in the Capital Market Act. The monetary sanctions for non or late disclosure are as follows:
- EUR 33,180 to EUR 66,360 for legal entity and
- EUR 6,630 to EUR 9,950 for the responsible person within the legal entity.
For individual person, penalty is set in the amount of EUR 6,630 to EUR 13,270.
Notwithstanding the above mentioned, the regulator is also entitled to impose other non- monetary sanctions and measures.
Shareholder identification as set out in the SRD II Law
The SRD II Law provides for the right for issuers to identify their shareholders that hold more than a particular percentage of shares or voting rights. Such a percentage shall not exceed 0.5%. Croatia has not set a threshold.
Issuers can request intermediaries at each level of a custody chain to promptly provide relevant information to facilitate such identification.
In accordance with SDR II Law as amended, an intermediary (in this case, CBL) shall, upon receipt of the shareholder identification disclosure request, transmit similar request to the next intermediaries in the custody chain (that is, CBL Clients with holdings in the requested securities). A response to the shareholder identification disclosure request shall be sent by every intermediary in the custody chain directly to the recipient's address defined in the request and without delay. CBL will generate the response as required, with information regarding shareholder's identity, limited to CBL books only.
Clients are hereby informed and acknowledge that, according to Article 297 E of the Companies Act (Official Gazette 40/19) of the SRD II Law, the intermediary that discloses information concerning the identity of shareholders for the purposes of the SRD II rules (including CBL) shall not be considered to be in breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision.
Obligation to report threshold crossings
As per the Credit Institutions Act and Insurance Act, special approval is required for acquiring ownership rights as follows:
- When acquiring more than 10% (or qualifying holding of 20%, 30% or 50%) of shares in local credit institutions, foreign or domestic investors must get an approval from the Croatian National Bank (CNB).
- When acquiring more than 10% and further qualifying holding of 20%, 30% (33% option valid for EU Member State residents only) or 50% in domestic insurance and investment company, in stock exchange or depository agency, an approval must be obtained from Croatian Financial Services Supervisory Agency (HANFA).
Amendments to the foreign exchange law, published on 14 December 2006, resulted in the abolishment of all restrictions on foreign investors investing in T-Bills issued by the Croatian Ministry of Finance and CNB-Notes, both in the primary and the secondary market.
As per Article 482 of the Capital Market Act, when a natural person or a legal entity directly or indirectly reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 30%, 50% and 75% of the total voting rights of a joint stock company registered in the Republic of Croatia, they shall notify the issuer and HANFA. The disclosure report has to be presented to the regulator (HANFA) and to the Issuer of shares within two (2) trading days:
- From the day the investor found out or could have found out about acquiring, releasing or having voting rights; or
- Found out about the issuer’s public announcement of changes in number of issued shares and other financial instruments such as futures, options, forwards, CFDs, swaps or any other agreements which have equivalent economic effect and give the same rights to holder as stock ownership or the right to acquire stocks or changes in number of voting rights.
It is considered that the investor has found out or could have found out about acquiring, releasing or having voting rights latest within two (2) trading days from the day of transaction.
In addition, under Croatian regulations, an investor, who acquires 25% or more of a publicly listed company, is obliged to make a public tender offer to all shareholders.