Disclosure Requirements – Portugal
Disclosure Category: 1
Local law and regulations may require Clearstream Banking, upon request and at least on a monthly basis, to disclose to the Comissão de Mercado de Valores Mobiliários (CMVM - the Portuguese Stock Exchange regulator) information relating to holdings of Portuguese equities.
Consent
Clients receiving Portuguese equities on their account consent and are hereby deemed to authorise Clearstream Banking to forward for disclosures purposes to the Securities Market Commission (Comissão do Mercado de Valores Mobiliários CMVM), such information as is required to be disclosed to the CMVM under Portuguese legislation or regulations.
Disclosure requirements
Article 86 of the Securities Market Code requires custodians to disclose the identity and holdings of clients holding applicable positions, at least on a monthly basis, to the CMVM.
Article 85 of the Securities Market Code states that the issuer can request information regarding aspects of nominal securities accounts.
- The issuer must submit the disclosure request to the CSD.
- The CSD can then ask the participants (in this case, Clearstream Banking's depositories, BNP Paribas S.A. or CBF) to provide the information.
- Clearstream Banking will provide the CSD with the names of the holders of the shares in its books.
Background and legal basis
The Shareholders Rights Directive was transposed into the national legislation through Law No. 50/2020, of August 25 2020 replacing the Decree Law 486/99 of 13 November 1999 and applies to:
- Issuers with registered office in a Member State; and
- Shares are admitted to trading on a regulated market located or operating in a Member State.
The information to be provided by issuers and to be transmitted to shareholders along the chain of intermediaries must be made in an electronic format (Swift).
The information must be provided by the issuer in the language in which it publishes its financial information and also in a language customary in the sphere of international finance.
The request for disclosure of the shareholders identification must be transmitted without delay by the Issuer CSD and by the intermediaries to the next intermediary in the chain and no later than by the close of the same business day as it received the information.
If the request is received after 16:00 on a business day, it must be sent without delay and, at the latest, by 22:00 on the next business day.
The reply to the request for disclosure of the shareholders identification must be sent without delay and no later than during the business day immediately following the record date.
The notification of General Meetings must be transmitted without delay by the Issuer CSD and by the intermediaries to the next intermediary in the chain, and no later than by the close of the same business day as it received the information.
If the request is received after 16:00 on a business day, it must be sent without delay and, at the latest, by 22:00 on the next business day.
Clearstream Banking has identified no legal obligation that would require it to disclose client holdings directly to the issuer.
Sanctions
Sanctions are complex but extend to disenfranchisement.
Non-response can also impact Clearstream Banking's membership with Euronext Securities Porto (also known as Interbolsa).
Obligation to report threshold crossings
Under Article 16 of the Securities Code (Código de Valores Mobiliários), approved by Decree Law 486/99 of 13 November 1999 and subsequently amended on 31 December 2021 with the Decree Law 99-A/2021, reviewing the Portuguese Securities Market Code with effect 30 January 2021, both shareholders and custodians are requested to disclose the beneficial owner, whether a legal or physical person, to the issuer and to the CMVM within four trading days, when reaching or crossing 5%, 10%, 20%, 33⅓%, 40%, 45% 50%, 55%, 60%, 66⅔%, 70%, 75%, 80%, 85% and 90% thresholds.
Shareholder identification as set out in the SRD II Law
The SRD II Law provides for the right of issuers to identify their shareholders.
Issuers can request intermediaries at each level of the custody chain to promptly provide relevant information to facilitate such identification.
In accordance with SDR II Law as amended, an intermediary (in this case, Clearstream Banking) shall, upon receipt of the shareholder identification disclosure request, transmit a similar request to the next intermediaries in the custody chain (that is, Clearstream Banking 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. Clearstream Banking will generate the response as required, with information regarding the shareholder's identity, limited to Clearstream Banking books only.