Decree-Law nr. 22/2016 of 3 June – 27th amendment to the Portuguese Securities Code

Decree-Law nr. 22/2016 of 3 June, which transposes into Portuguese law part of Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013, introducing the twenty-seventh amendment to Portuguese Securities Code, was published in the Portuguese Official Gazette.

Directive 2013/50/EU amends Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (the Transparency Directive), Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading (the Prospectus Directive) and Commission Directive 2007/14/EC of 8 March 2007 laying down detailed rules for the implementation of certain provisions of the Transparency Directive.

One of the main amendments to the Portuguese Securities Code introduced by Decree-Law nr. 22/2016 is the extension of the duties of notification and disclosure of information about the holding of financial instruments in accordance with articles 16 and 20 of the Portuguese Securities Code covering the financial instruments with an economic effect similar to the holding of shares.

In relation to the duty to disclose quarterly information, as it can be a particular financial burden on small and medium-sized issuers whose shares are admitted to trading on a regulated market in Portugal, this duty to disclose information is eliminated for these issuers with the exception of those that are financial institutions.

However, the small and medium-sized issuers, if they wish, can continue disclosing the quarterly financial information, provided that they do it for a minimum continuous period of two years and in accordance with the harmonized rules ensuring the comparability of the disclosed information to be laid down in a Portuguese Securities Commission (“CMVM”) Regulation. Until CMVM has adopted this regulation, the issuers shall disclose the information in accordance with the former wording of article 246-A of the Portuguese Securities Code and the relevant ancillary regulation.

It is also important to mention the extension of the deadline for publication of the half-yearly information to three months after the end of the first half of the financial year and the extension to 10 years of the period in which the annual and half-yearly information must be available to investors.

Other relevant amendments have been introduced in relation to the mandatory information disclosure obligations regarding securities admitted to trading, such as: (i) rules on the choice and determination of the Member State of origin and the respective competent authority in the case of issuers who have to choose it; (ii) rules on the choice of the Member State of origin and the respective procedure by issuers incorporated in a third country; and (iii) rules governing the language applicable to the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market.

Furthermore, article 109 of the Portuguese Securities Code, related to public offers, is also amended considering as a public offer an offer of securities addressed to, at least, 150 natural or legal persons per Member State, other than qualified investors, thus no longer making reference to the residence or establishment in Portugal criterion.

These amendments aim to contribute to a further harmonization of transparency requirements on the regulated markets, in accordance with several solutions already adopted in different Member States, without compromising the level of investor protection.

The aforementioned Decree-Law will enter into force on the day following publication in the Portuguese Official Gazette.