ECGS against any German share blocking


In order to put an end to the German 'share blocking tale' DSW, the German ECGS member,  requested the German Financial Markets Authority (BaFin) to clarify as early as possible the most recent discussions on the OLG Köln court decision.  This court ruling had led to a wave of confusion at some German custodian banks and as a consequence was also misinterpreted by institutional investors abroad.


 In its decision the court imposed surprisingly that custodian banks which are registered as representatives for institutional investors also have the duty to disclose and announce any changes in the shareholding thresholds which trigger the reporting requirements, even if they only combine shareholdings for several small investors which taken as a separate case would not trigger any reporting requirements.

 As a consequence,  German custodian banks revised their internal processes and re-registered shares of their clients in aggregated accounts. Moreover, some custodians now flag these re-registered shares as 'potentially blocked'.

 As the low turnout at the recent general meetings of Siemens and Infineon have shown there is an urgent need  to react fast since there is a serious danger that foreign institutional investors will refrain from voting at the German shareholder meetings.

 According to DSW  it is up to the German "watchdog" BaFin to confirm that no such threshold announcements by the custodian banks are required and that there is no such thing as share blocking in Germany- neither legally nor factually.

 Paris, 25th March 2013