Through several legal measures, the German Government has been keen to strengthen shareholders’ rights by implementing more severe transparency requirements. Accordingly, the Ministry of Justice intends to prevent investors from the unidentified acquisition of shares in German-listed stock corporations. According to a ministry spokesman, the threshold of notification shall be reduced from 5% to just 3%. According to Section 21 of the German Securities Trade Act, investors who acquire a stake in a listed German stock corporation amounting to 5% or more are obliged to notify the target company and the German Financial Supervisory Authority (BaFin) within seven days of completing the acquisition.
The new 3% threshold is part of the discussion about the proposed transparency law which shall transform a European Union (EU) directive into national law. However, the directive does not provide for a specific threshold of notification, leading to some variation of that threshold among member states.
