Dr Panayiotis Alexakis President, CEO Athens Exchange S.A. June 11, 2004

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OECD – WORLD BANK South Eastern Europe Corporate Governance Roundtable Transparency and Disclosure. Usage and Enforcement. The most effective method to recognize useful proprietors Dr Panayiotis Alexakis President, CEO Athens Exchange S.A. June 11, 2004

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Why is distinguishing the gainful proprietor essential? What is implied by the expression "useful proprietor" Which are the principle apparatuses for distinguishing the gainful proprietor? The Greek experience

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I. Why is recognizing the advantageous proprietor vital? Registry purposes – Benefits for the guarantor Allowing financial specialists and above all retail speculators to take choices in light of data, as to their interest in a venture – Benefits for the financial specialist Improving the level of adjusting and securing the end financial specialist – Benefits for the financial specialist State supervision – Benefits for the general public

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I.1) Why is recognizing the advantageous proprietor critical for registry purposes? Recognizing the useful proprietor helps the guarantor to: perform corporate activities in a more acceptable and expedient path for all its titleholders. In the event that the guarantor knows the personality and area of his shareholders, he can make every single vital course of action for fulfilling corporate activities (e.g. profit installments et.c.) productively contemplate the examples, which global speculators take after, when they settle on their venture choices. At the end of the day, recognizing the gainful proprietor is a solid weapon for the organization's IR division comprehend huge changes in the shareholders' structure of the organization. These progressions may likewise flag future assume control endeavors

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I.2) Why is recognizing the advantageous proprietor imperative for speculation choices? The shareholder structure, and additionally the correct snapshot of interest and exit of real financial specialists, is a definitive variable, which helps the speculator to take his venture choices Identifying and uncovering the above information is a solid weapon against insider managing that could occur if an identical exposure administration had not been set up

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I.3) How is distinguishing the useful proprietor adding to speculator overhauling and insurance? In a perfect world, new innovation empowering the work of STP process at all levels of the exchange, would give the advantageous proprietor the chance to execute specifically in the business sectors, constraining the extent of money related intermediation Direct enlistment of the gainful proprietor in the focal framework (for instance in the CSD) encourages the work of STP at all levels of exchange and for all intents and purposes expands the valuable proprietor's chance for direct access in the business sectors.

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I.4) Why is distinguishing the useful proprietor critical for reasons of state supervision? Tax evasion concerns The New EU Directive extends the scope to a progression of non-monetary exercises and callings that are defenseless against abuse by cash launderers. Prerequisites as respects customer ID, record keeping and reporting of suspicious exchanges are consequently stretched out to outer bookkeepers and examiners, land specialists, legal officials, attorneys et.c.. This demonstrates the worry of the EU for anticipating IRS evasion, to which recognizing helpful proprietor contributes altogether Global wellbeing concerns Tax shirking issues Special purposes, for which the character divulgence of the shareholders is esteemed as vital. As ideal models: State contractual workers Media organizations

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II) What is implied by the expression "gainful proprietor" It is a term inferred by the customary law "value" administration. It implies the individual, who is qualified for appreciate the monetary rights coming from the proprietorship, despite the fact that the possession has been enrolled for the sake of another person (the legitimate proprietor), who holds the question in his own name yet for the benefit of the advantageous proprietor The gainful proprietor is the "aberrant" proprietor. Along these lines helpful enrollment structures are known as "aberrant holding", "chosen one enlistment" or "omnibus holding" structures rather than the "end-financial specialist" or "direct holding" structures.

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Continental property law generally needed advantageous possession structures. Be that as it may, backhanded holding in a worldwide economy had initially been viewed as a reasonable need. To determine the issue, most mainland lawful requests consolidated a provision in their bankruptcy law whereby it was perceived that property enrolled in omnibus records were isolated from the pool of advantage of the lawful proprietor in his indebtedness occasion. Along these lines, circuitous holding frameworks turned out to be legitimately more secure and business-wise qualified Systems that picked the end-financial specialist approach then again, depended on an intermediary whereby the (characteristic or lawful) individual enrolled in the framework, specifically the accountholder, was perceived as the last proprietor of the securities. Shameful enlistment in end-financial specialist frameworks (specifically, enrollment of simply the legitimate proprietor) involved some level of lawful hazard for the valuable proprietor, who ran the threat of having a unimportant authoritative case, rather than a property right, on account of the lawful proprietor's indebtedness.

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III) Which are the principle instruments for recognizing the gainful proprietor? The two principle apparatuses for gainful proprietor distinguishing proof are: The commitment to reveal to the market real possessions acquisitions or transfers The end financial specialist registry framework These instruments are not compatible, neither from a legitimate nor from an agent point of view. They serve diverse needs and perform distinctive capacities

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III.1a) The commitment to uncover From a legitimate perspective, the commitment to reveal has, since 1988, been a bit of European enactment (Dir.88/627 later fused in the 2001/34 Dir and right now a substantive part of the Transparency Directive) In the present EU administration, the commitment lies at first with the individual who secures or arranges and at a second level on the guarantor, if and when he is educated. The individual must make the declaration the seventh date-book day the most recent from the day he learnt he has obtained or arranged the shares The new Transparency Directive extends the time of declaration to 7 exchanging days and it changes the procedure: the procuring or arranging individual will be obliged inside 4 exchanging days to tell the backer, who will inside the following 3 exchanging days, inform the market. The home Member-State is not kept from utilizing a more stringent administration

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III.1b) The commitment to uncover as a device of recognizing the helpful proprietor – Pros and CONS Significant time slip by of 7 days from the securing or transfer Lack of any focal cross-checking instrument. The exposure lays on the hands of the advantageous proprietors Limited help to the registry work, since just significant shareholdings are declarable and the time slip by is extensive HOWEVER This instrument is a typical practice for all business sectors and is essentially simpler for huge markets, where the work of an immediate holding structure would conceivably require substantial innovative speculation

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III.2a) The end – financial specialist approach/experts The end-speculator approach is, as we beforehand said, legitimately made by an intermediary whereby the individual enlisted as the record proprietor (regularly in a CSD framework) is accepted as the last (both lawful and gainful) proprietor of the securities recorded in that The end speculator framework has the impact of the immediate revelation of the valuable proprietor personality with the broke down beneficial outcomes for the backer, the financial specialist, the state control components et.c. Coordinate holding frameworks are encouraged by the new innovation (APIs) These frameworks are of a base lawful and agent chance, since all property are specifically enlisted in the database of a CSD, whose dangers are least in contrast with the guardianship dangers of a chain of delegates in a backhanded holding framework. Furthermore, issues with respect to the law material for the assurance of proprietorship rights get a more clear reply: generally the law pertinent will be the one that administers the immediate holding framework.

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III.2b) The end – financial specialist approach/cons Despite slow unification of innovative arrangements connected in registry and care benefits, the issue remains that immediate holding structures show up as requesting from the worldwide caretaker, the advancement of different interfaces that empower him to associate with neighborhood frameworks. Along these lines, centralization of back office operations is not empowered. This inconvenience will bit by bit vanish with the work of new mechanical arrangements (APIs) Proper direct holding enlistment requires an agreeable level of successful and proficient correspondence between the registry framework (ordinarily, the CSD) and its members (the caretakers), which is not generally simple. Coordinate holding frameworks must not deny the financial specialist and in particular the middle person of the benefit to keep in namelessness information associated with his/her character or to the personality of its customers

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The presence of the intermediary concerning the personality of the valuable proprietor (to be specific, the suspicion that the last proprietor of the considerable number of possessions recorded in a record is the record proprietor) might be viewed as discretionary. The issue is because of despicable enrollment. However this "abuse" of the immediate holding framework has the accompanying weaknesses: Discrepancy between the information originating from the CSD framework and those coming from the real property revelation framework, as respects the gainful proprietor's character. Wrongful data to the backer or to other information recipients High level of lawful hazard on the flow of the title through aberrant holding chains, as above portrayed.

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IV) The Greek experience The Greek market utilizes both apparatuses for distinguishing the useful proprietor of securities P.D. 51/92 executing Major Holdings Disclosure Di