NETHERLANDS - The Financial Markets Authority, the supervisor for pensions communication, has revealed funds will be given three months' leeway on the introduction of the indexation label while they cope with ongoing turmoil in the financial markets.
It will start checking whether pension funds fulfil their legal obligation on the label as of 1 April next year rather than as of 1 January, said its chairman, Hans Hoogervorst, during the Foundation for Company Pension Funds (OPF) annual congress.
"We want to enable pension schemes to base their forecast for indexation on solid figures," the AFM chaimanr explained.
Hoogervorst also announced increased supervision on the new uniform pension statement (UPO), which will include the indexation label, next year.
"We will in particular check whether the UPOs are correct and consistent and whether they are being send in time. We will also look into the correctness of the statement for new and leaving employees," Hoogervorst pointed out.
In developments elsewhere, Eumedion, the corporate governance platform for institutional investors, has proposed legislation be introduced to prevent the build-up of a large stake in a takeover target through hidden ownership and empty-voting.
"Equity swaps and cash settled options - the most common and potentially problematic derivative positions - should be included in the calculations for the legal threshold for notifying a 5%-stake in a company," Eumedion has argued in a position paper it has sent to parliament.
Derivatives, such as equity swaps and options, are usually deployed for hedging risks. However, they can also be used to decouple shares-linked say from the capital-funded ownership of shares, it pointed out.
In Eumedion's opinion, the present legal limit of 30% of voting rights for a mandatory bid for a company must be extended to derivatives.
That said, it also suggested an exemption on the 30%-rule be introduced in case of a "voluntary bid against a reasonable price".
In order to increase transparency, the legislator should explicitly include cash settled equity swaps and cash settled options, as transactions to be made public, Eumedion claimed in its paper.
In addition, the lobbying body believes there should be an obligation on interested parties to fully disclose both legal and economic interests by those requesting issues to be tabled, or when asking for extraordinary shareholders' meetings.
It claimed this would prevent the negative effects of empty voting through shares-lending.
Eumedion believes the transparency around the voting rights and efficiency of price setting must prevail over the increased administrative burden of including derivatives positions within the voting process.
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