HL Deb 19 July 1993 vol 548 cc580-1

6.38 p.m.

Viscount St. Davids rose to move, That the draft regulations laid before the House on 27th May be approved [32nd Report from the Joint Committee].

The noble Viscount said: My Lords, the draft regulations laid before the House will, if your Lordships approve them, be made under Section 210A of the Companies Act 1985. They will amend the Companies Act provisions that require someone who has an interest in a public company's shares to disclose to the company when that interest reaches certain levels.

The draft regulations, in spite of their length and apparent complexity, do not change the basic structure of the existing disclosure regime. Disclosure from a minimum threshold of 3 per cent. will continue to be the normal rule. What the regulations do is to modify the exemptions from disclosure and to introduce a higher minimum threshold of 10 per cent. in certain very limited circumstances.

The regulations' main purpose is to take account of the EC directive on the information to be published when a major holding in a listed company is acquired or disposed of—known as the major shareholdings directive for short. The directive sets minimum standards for a disclosure regime, but in most respects these are somewhat less strict than our existing disclosure laws.

However, the directive does not contain as many exemptions from disclosure as we currently have in Section 209 of the Companies Act. Rather than simply revoke the exemptions, we have sought to preserve as much of their effect as possible by taking advantage of the more limited scope of the directive.

We have worked closely with representative organisations, and that has helped ensure that any burdens arising from new requirements we have had to impose as a result of the directive have been minimised. The directive's impact will be greater in most other member states, many of which previously had either very limited disclosure rules or none at all. The directive is therefore good news for UK investors as it will improve market transparency within the Community. At the same time, we have been able to keep the basic structure of our disclosure regime, with relatively minor modifications, and we have been able to use these regulations to make some other worthwhile changes which will remove some unnecessary disclosure requirements. I therefore commend these regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 27th May be approved [32nd Report from the Joint Committee].—(Viscount St. Davids.)

Lord Graham of Edmonton

My Lords, in the absence of my noble friend Lord Peston, I can tell the House that he has no objection to the passage of the regulations.

Viscount St. Davids

My Lords, the regulations will enable us to contribute to greater transparency regarding the control of listed companies throughout the Community while limiting to a minimum the regulatory burden on UK business. I hope that the House will now approve them.

On Question, Motion agreed to.