Issuer Limit Rules: Explained

What are the Issuer Limit Rules?

Our Issuer Limit Rules cover the major shareholding limits for jurisdictions where issuers may impose bespoke disclosure thresholds in their articles of association. These issuer-imposed thresholds may be lower or narrower than the thresholds required by the regulator.

Because there is limited guidance on how to calculate a shareholder’s percentage ownership for these thresholds, we provide eight variants of the issuer limit rules to accommodate different considerations: aggregation level (i.e. which entities and portfolios to include; this will vary by client) and aggregation structure (i.e. management or voting power; which may vary by issuer or jurisdiction).

In total, only four of these Issuer Limits rules should be activated within your environment at any given time.

Aggregation Level

The subset of rules that you select depends on what level of aggregation you require:

AllEntities: this means that the rules will aggregate all portfolios up to a specific sub-entity and trigger a disclosure based on all the assets of the sub-entity child portfolios. Further, should there be a Top Level Company as the ultimate parent, the rule will also trigger a disclosure based on the aggregate holdings across all portfolios.

AllEntitiesAndPortfolio: this means that the rules will trigger disclosures on both sub-entities and a Top Level Company, but in contrast to the "All Entities" level, a disclosure on each individual portfolio is possible here as well. So, this is a combination of "Portfolio" and "All Entities".

Once you have determined which aggregation level to use, you will know which rules to keep and which to deactivate. 

In the table below, a client who chooses to use the AllEntities level will deactivate the rules in the right-hand column. 

Aggregation Level: 

AllEntities

Aggregation Level:

AllEntitiesAndPortfolio

Issuer Limits - Shares: Legal Aggregation Issuer Limits - Shares - Portfolio: Legal Aggregation
Issuer Limits - Voting: Legal Aggregation Issuer Limits - Voting - Portfolio: Legal Aggregation
Issuer Limits - Shares: Voting Aggregation Issuer Limits - Shares - Portfolio: Voting Aggregation
Issuer Limits - Voting: Voting Aggregation Issuer Limits - Voting - Portfolio: Voting Aggregation

 

Global Settings for AllEntities or AllEntitiesAndPortfolio

You can now control this by Global setting so that you can have all Issuer Limits Rules activated but only receive Results for one set. By default, the Global Settings are on, and so will give you results for all active Issuer Limits Rules.

You can stop receiving results for the AllEntities rules by disabling RunIssuerLimitsAllEntities

You can stop receiving results for the AllEntitiesAndPortfolio rules by disabling RunIssuerLimitsAllEntitiesAndPortfolio

We recommend that you disable one of the Global Settings and leave the other enabled.  This should make future Rule approvals simpler. If you choose not to configure the Global Settings at this time, you can continue to receive results for only one set of Rules by deactivating the rules you do not wish to use.

See this Deactivating and Reactivating Rule Versions article for guidance on deactivating rules. 

Aggregation Structure

“Voting Aggregation” and “Legal Aggregation” refer to which assets will be captured by the rule - those for which the parent entity has voting power or those for which the parent entity has legal or management power. See this Aggregation Framework article for information about the different aggregation structures. 

In GCD, the “Aggregation” field will determine which aggregation structure will apply. An issuer with “Voting” in this field will show results for “Voting Aggregation” rules, not the “Legal Aggregation” rules. . 

Most issuers in GCD have “Voting” as the aggregation structure. This is because the vast majority of issuers with limits are incorporated in France or Belgium.

Guidance in those jurisdictions is clear that issuer limit thresholds should be calculated according to the requirements set out in the relevant statutory rules (in both cases, where one has power over voting rights). 

Without specific regulatory guidance, any other issuer-imposed thresholds may apply to where either management or voting power is held.

If you believe an issuer has the incorrect aggregation structure in GCD, you can submit a request to edit the record via the Limits tab in GCD. This request will be reviewed by our Regulatory team.

How can we tell which issuers are included?

Our lists of issuers with limits and the lists which define how the rules operate are maintained in the Global Company Database (GCD) > Companies with Limits. For information on the source (website) for each issuer limit, this can be found in GCD > Companies with Limits > Source.

How do issuer limits get added to GCD? 

We add companies with issuer limits any time we are informed of them by clients, so they are primarily crowd-sourced. 

If you have any updates or amendments you would like to suggest, please find the company you wish to make the change to in the Global Company Database and then follow the instructions on this page to request the change.

What is the process for updating and monitoring issuer limits in GCD?

Issuer limits in GCD are community-powered, and we encourage our clients to notify us in the manner described above if they are aware of any changes to an issuer's information.

Transition to Rule Version 6 - FAQ

What’s changing in these new versions of the Issuer Limit rules?

New versions of the issuer limit rules will use Issuer Limits data in GCD (Global Company Database) rather than in value sets. 

We’re also introducing a new global setting you can use to simplify future rule approvals; more on that below.

What if GCD has different thresholds than the value sets?

We have completed a reconciliation between the data currently in the Issuer Limits value sets to those in GCD. All Issuer limits within value sets are present in GCD.

However, if you want to add or change an issuer limit, you can do so by making a GCD Change Request. You will be asked to provide evidence as well (such as a link to the issuer’s articles of association).

How will this affect my results?

As part of this shift to GCD, the "key" for each Issuer Limit Result will change. Consequently, on the first file run after approving the new version, if you hold a position over the lowest limit, then you will receive a new disclosure in Rapptr - an entry disclosure from the new "key".  There will also be an exit Unknown from the old “key”, except for Belgian issuers with limits, where your position is more than 5% (in which case you should receive a Disclosure).

You will need to review each disclosure to verify whether or not a threshold has been crossed.

Does this mean we’ll get exit and entry disclosures whenever a company’s name changes?

No. Because of the way this is configured in GCD, the name will stay up-to-date with Issuer Name changes without triggering false positives when there is a name change.

What if I want to add or change an issuer limit?

You can do so by making a GCD Change Request as described in this Requesting Changes or Edits to Issuer Data article. You will be asked to provide evidence as well (such as a link to the issuer’s articles of association).

Do I still have to do that thing where I deactivate half of the Issuer Limit rules, depending on whether I want to use AllEntities or AllEntitiesAndPortfolio?

Not for long! One of the other improvements we’re introducing in this version is allowing you to control this by Global setting so that you can have all Issuer Limits Rules activated but only receive Results for one set.

By default, the Global Settings are on, and so will give you results for all active Issuer Limits Rules.

You can stop receiving results for the AllEntities rules by disabling RunIssuerLimitsAllEntities

You can stop receiving results for the AllEntitiesAndPortfolio rules by disabling RunIssuerLimitsAllEntitiesAndPortfolio

We recommend that you disable one of the Global Settings and leave the other enabled.  This should make future Rule approvals simpler.

If you choose not to configure the Global Settings at this time, you can continue to receive results for only one set of Rules by deactivating the rules you do not wish to use, as outlined above.

Can I stick to the old version of the rules and not approve the new versions?

You could, but there is a risk. Be mindful that the value sets of the old rules will not be maintained once the new rule versions are released. The rule versions which reference the value sets will continue to run, but the value sets themselves will not change. 

For example, say Company X updates their Articles of Association to decrease their initial disclosure threshold from 2% to 1%. A diligent client would submit a change request in GCD, which FundApps would then review and approve. 

The latest versions of the Issuer Limits rules would begin using the 1% threshold for that issuer. However, clients using the old version would miss out on that community-powered update, because the value sets would still have the 2% threshold. 



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