The Evolution of Ownership Disclosure Rules Across Countries

Journal of Corporate Law Studies, Vol. 10, 2010

Centre for Business Research (CBR) of the University of Cambridge Working Paper No. 393

38 Pages Posted: 16 Jul 2009 Last revised: 8 Apr 2011

Michael C. Schouten

University of Amsterdam, Faculty of Law; Duisenberg School of Finance

Mathias M. Siems

Durham University - Durham Law School; University of Cambridge - Centre for Business Research

Date Written: November 8, 2010

Abstract

Over recent years, a number of regulators have launched proposals to expand the obligation to disclose major share ownership in listed companies. This paper shows that these are not stand-alone developments. Using a unique dataset comprising data from 25 countries over 11 years (1995-2005) and collected by the Centre for Business Research of the University of Cambridge, we empirically study the evolution of ownership disclosure rules across countries. The analysis demonstrates that these rules have become more stringent over time, in the sense that disclosure thresholds have been lowered, and that there has been convergence. A breakdown of the results suggests that the degree of countries’ economic development is a relevant factor in explaining the differences between countries. The analysis also suggests a positive correlation between ownership disclosure and other variables that protect minority shareholders, as well as a positive correlation between the stringency of countries’ ownership disclosure rules and the degree of dispersed ownership. In the paper, we offer various possible explanations for these results. Going forward, while it appears unlikely that disclosure thresholds will be lowered much further, ownership disclosure rules can be expected to continue to evolve in other dimensions. Regulators are likely to broaden the definition of the stake that triggers disclosure so as to ensure that the ultimate owner is reached. In addition, regulators may require more information be disclosed when the notification is made, so as to enable other investors and issuers to adequately assess the implications of major share ownership.

Keywords: ownership disclosure, shareholder protection, comparative company law, law and finance, legal convergence

JEL Classification: G10, G30, G38, G38, K22, K42, N20, N40, O16, P50

Suggested Citation

Schouten, Michael C. and Siems, Mathias M., The Evolution of Ownership Disclosure Rules Across Countries (November 8, 2010). Journal of Corporate Law Studies, Vol. 10, 2010; Centre for Business Research (CBR) of the University of Cambridge Working Paper No. 393. Available at SSRN: https://ssrn.com/abstract=1434144

Michael C. Schouten (Contact Author)

University of Amsterdam, Faculty of Law ( email )

Amsterdam, 1018 WB
Netherlands

Duisenberg School of Finance ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Mathias M. Siems

Durham University - Durham Law School ( email )

Stockton Road
Durham, County Durham DH1 3LE
United Kingdom

HOME PAGE: http://www.dur.ac.uk/mathias.siems

University of Cambridge - Centre for Business Research ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.cbr.cam.ac.uk/people/research-associates/mathias-m-siems/

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