Translated by the Ministry of Finance
Consolidated version as of 04/12/2015
Revised version as of 04/12/2015:
No. XII-2074, 26/11/2015, published TAR 03/12/2015, i. k. 2015-19282
Article 1. Objective and Purpose of the Law
1. The purpose of this Law is to establish the procedure for the preparation, approval and publishing of a prospectus and takeover bids as well as the requirements for the disclosure and storage of periodic and current information
Article 2. Main Definitions of this Law
1. Holding – the share of the voting rights of an issuer held at the general meeting of shareholders by a shareholder representing 5 percent or more of the total voting shares.
2. Shareholder – a person, who holds either shares of the issuer of securities acquired thereby in his own name and on his own account or shares of the issuer of securities acquired thereby in his own name but on behalf of another natural person or legal entity or depositary receipts in respect of shares.
3. Secondary trading in securities – an offer to acquire securities and their transfer after the completion of the primary trading in the securities.
4. Open-end collective investment undertaking – an investment fund or an investment company:
1) the objective of which is through a public distribution of shares or investment units to raise funds from the public and invest the same collectively into securities and/or other assets specified in the Law on Collective Investment Undertakings of the Republic of Lithuania thus spreading the risk;
6. The company in respect of whose shares a takeover bid is to be submitted – a company, the securities whereof should be the subject of a take-over bid.
8. Multiple-vote securities – securities assigned to a separate class and carrying at the general meeting of shareholders more than one vote.
9. Multilateral trading facility – a facility as defined in the Law on Markets in Financial Instruments of the Republic of Lithuania.
10. Depositary receipt in respect of shares – a security issued by the depositary representing the right of its holder to receive income from the issuer of securities in the amount depending on the amount of such issuer’s income from another issuer’s shares and the right to exchange such security into the issuer’s shares.
11. Electronic means – means of electronic equipment for the processing (including digital compression), storage and transmission of data, employing wires, radio, optical technologies, or any other electromagnetic means.
12. Material event – an event which is related to the activity of the issuer of securities and therefore is or must be known to it, the disclosure of information on which might have a significant influence on the market price of the issuer’s securities.
13. European Systemic Risk Board – an institution established on the basis of Regulation (EU) No. 1092/2010 of the European Parliament and the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (OJ 2010 L 331, p.1) (hereinafter referred to as the Regulation (EU) No. 1092/2010).
14. European Securities and Markets Authority – an institution established on the basis of Regulation (EU) No. 1095/2010 of the European Parliament and the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ 2010 L 331, p.84) (hereinafter referred to as the Regulation (EU) No. 1095/2010).
15. Financial brokerage firm – as defined in the Law on Markets in Financial Instruments of the Republic of Lithuania.
16. Annual report of an entity (hereinafter referred to as the Annual Report) – as defined in the Law on Financial Statements of Entities of the Republic of Lithuania.
17. Six-month report of an entity (hereinafter referred to as the Six-Month Report) – a report supplementing a set of six-month financial statements of an entity (hereinafter referred to as the Six-Month Financial Statements) covering the information on the fundamental events, which took place during the first 6 months of the financial year, and their influence on six-month financial statements, including the description of principal risks and uncertainties during the next 6 months of the financial year.
18. Group of undertakings – as defined in the Law on Consolidated Accounts of Groups of Undertakings of the Republic of Lithuania.
19. Consolidated annual report of a group of undertakings (hereinafter referred to as the Consolidated Annual Report) – as defined in the Law on Consolidated Accounts of Groups of Undertakings of the Republic of Lithuania.
20. Consolidated six-month report of a group of undertakings (hereinafter referred to as the Consolidated Six-Month Report) – a report supplementing a set of six-month consolidated financial statements of a group of undertakings (hereinafter referred to as the Six-Month Consolidated Financial Statements) covering the information on the fundamental events, which took place during the first 6 months of the financial year, and their influence on six-month consolidated financial statements, including the description of principal risks and uncertainties during the next 6 months of the financial year.
22. Source indicated in the articles of association – as defined in the Law on Companies of the Republic of Lithuania.
23. Management company of the collective investment undertaking (hereinafter referred to as the Management Company) – as defined in the Law on Collective Investment Undertakings of the Republic of Lithuania.
24. Securities of collective investment undertakings – investment units of an investment fund and shares of an investment company representing the right of the holder thereof in respect of a share of the assets of such collective investment undertaking, and the right to require such securities to be redeemed at any time.
25. Credit institution – as defined in the Law on Financial Institutions of the Republic of Lithuania.
26. Company with reduced market capitalization – a company listed on a regulated market with an average market capitalization of less than EUR 100 million on the basis of end-year quotes for the previous three calendar years.
27. Small and medium sized enterprises – legal entities which according to the set of their last annual financial statements (hereinafter referred to as the Annual Financial Statements) or the set of annual consolidated financial statements (hereinafter referred to as the Annual Consolidated Financial Statements) comply with at least two of the following criteria:
28. Non-equity securities – bonds or other transferable securities certifying the indebtedness except the securities which are equivalent to securities of public companies or which, upon their conversion or the exercise of the rights conferred by them, grant the right to acquire shares or securities equivalent to shares.
29. Securities issued in a continuous and repeated manner – a continuous issue of securities of the same type and/or class or at least two separate issues of a similar type and/or class over a period of 12 months.
30. Equities (equity securities) – securities which are:
3) transferable securities of any other type giving the right to acquire any of the securities referred to in Paragraphs 1 and 2 of this Article by converting them or through the exercise of the rights conferred by them, provided that securities referred to in this point have been issued by the issuer of securities underlying those referred to in Paragraphs 1 and 2 of this Article or by an undertaking belonging to the group of undertakings of the said issuer.
31. Takeover bid circular (hereinafter referred to as the Circular) – the document disclosing the main information about the bid.
32. Parties to the takeover bid – the offeror, members of the offeror’s management bodies if the offeror is a legal entity, the offeree company, holders of securities of the offeree company, and the members of the management bodies of the offeree company, and persons acting in concert with such persons.
35. Subsidiary undertaking – as defined in the Law on Consolidated Accounts of Groups of Undertakings of the Republic of Lithuania.
36. Parent undertaking – as defined in the Law on Consolidated Accounts of Groups of Undertakings of the Republic of Lithuania.
37. Transferable securities – as defined in the Law on Markets in Financial Instruments of the Republic of Lithuania except money market instruments the term of validity whereof is shorter than 12 months.
38. Primary trading in securities – an offer to acquire securities and a transfer of these securities at the time of their issuance.
39. Supervisory authority – the Bank of Lithuania which performs supervisory functions of markets in financial instruments.
40. Host Member State – a Member State in which the takeover bid is implemented, the admission to trading in securities on a regulated market is sought, or in which trading in securities on a regulated market is permitted when different from the home Member State.
41. Mandatory takeover bid – a mandatory takeover bid submitted by a person who has acquired over 1/3 of votes in the general meeting of shareholders of the offeree company to the holders of the remaining securities of the offeree company, to buy up the remaining voting securities of the offeree company and securities representing the right to acquire such voting securities.
42. Qualified investor – an investor meeting the criteria of a professional customer defined in the Law on Markets in Financial Instruments of the Republic of Lithuania.
43. Prospectus – a document intended for investors and the general public and containing the information on the issuer of securities and its securities offered to the public or admitted to trading on a regulated market.
44. Approval of the prospectus – a positive decision of the supervisory authority of the home Member State passed upon the scrutiny of the completeness, consistency, and comprehensibility of the information given in the prospectus, which confirms that the information provided in the prospectus complies with the rules on the provision of such information.
45. Regulated information – regulated information, as defined in the Commission Regulation (EC) No. 809/2004 of 29 April 2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements (OJ 2004 L 149, p. 1), as last amended by the Commission Delegated Regulation (EU) No. 759/2013 of 30 April 2013 (OJ 2013 L 213, p. 1) (hereinafter referred to as the Regulation (EC) No. 809/2004).
46. Regulated market – as defined in the Law on Markets in Financial Instruments of the Republic of Lithuania.
47. Regulated market operator – as defined in the Law on Markets in Financial Instruments of the Republic of Lithuania.
48. Market maker – as defined in the Law on Markets in Financial Instruments of the Republic of Lithuania.
49. Voluntary takeover bid – the takeover bid announced at the discretion of a person and under the terms established thereby to the holders of securities to purchase all voting securities issued by the offeree company or part thereof, and/or securities representing the right to acquire the voting securities.
50. Persons acting in concert – natural persons or legal entities who cooperate with the offeror or the offeree company on the basis of an agreement, either express or tacit, oral or written, aimed at acquiring the control of the offeree company granting 1/3 or more of the votes in the general meeting of shareholders of the offeree company or at frustrating the successful outcome of the bid. Persons controlled by another person acting in concert with that other person shall also be deemed acting in concert with one another. It shall be deemed that in the cases referred to in Article 26 of this Law the persons act in concert.
51. Third country – a non-Member State of the European Union or a country not belonging to the European Economic Area.
52. Third country’s supervisory authority – an institution performing in a non-Member State the functions analogous to the functions of a supervisory authority as provided for in this Law.
53. Member State – a Member State of the European Union or a State that belongs to the European Economic Area.
54. Member State’s supervisory authority – an institution performing in the Member State the functions analogous to the functions of a supervisory authority as provided for in this Law.
55. Issue of securities (hereinafter referred to as the Issue) – the issue of securities conferring identical property and non-property rights to their owners or the entirety of securities issued at one time conferring identical property and non-property rights to their owners.
56. Issuer of securities (hereinafter referred to as the Issuer) – a person proposing to issue or issuing its securities. A legal entity incorporated in the Republic of Lithuania shall be considered an issuer:
1) where its securities have been admitted to trading on a regulated market in the Republic of Lithuania and/or other Member State; or
2) where the prospectus of securities issued by it from 12 July 2005 was approved by the supervisory authority and securities issued on the basis of this prospectus were offered publicly or admitted to trading on a regulated market and all of these securities or their part placed or admitted to trading in a regulated market; or
3) other legal entity provided its securities are offered publicly. The securities of the issuer shall be considered to be offered publicly where starting from 1 January 2002 the issuer has issued to public trading at least one issue of securities and the general meeting of shareholders of such issuer has decided within 6 months from the coming into effect of this Law to continue the public offering of securities. Where the documents confirming the decision to continue the public offering of securities within 6 months are not submitted to the supervisory authority, for the purpose of this Law such legal entity established in the Republic of Lithuania is not considered to be the issuer; or
4) in case of the issuance of depository receipts in respect of shares related to the securities, which are traded on a regulated market, an issuer shall be deemed to be an issuer of securities represented by such receipts regardless of whether such securities have been admitted to trading on a regulated market.
57. Guarantor of the issuer of securities (hereinafter referred to as the Guarantor) – a person securing the discharge of the obligations arising from securities and/or the distribution of securities of the issuer on its own account.
58. Managers of the issuer of securities (hereinafter referred to as the Managers of the Issuer) – a member of the supervisory board, of the board, the manager of the company – the issuer.
59. Advertisement of securities (hereinafter referred to as the Advertisement) – advertisement, as defined in Commission Regulation (EC) No. 809/2004.
61. Offeror of securities – a natural person or legal entity offering or intending to offer securities publicly.
62. Public offering of securities – a communication to persons in any form and by any means offering securities and presenting the information on the terms of such offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe to the securities being offered. Offering of securities through intermediaries of public trading in securities shall also be deemed to be the public offering provided it meets the features of the public offering described in the first sentence of this paragraph. Communication to persons on the basis of trading in the regulated market of the Republic of Lithuania is not deemed to be the public offering of securities. Admission of securities to trading in the multilateral trading facility or the communication to persons on the basis of trading in the multilateral trading facility is not deemed to be the public offering of securities either.
Article 3. Application of the Law on Securities
1. For the purpose of this Law securities shall be deemed to constitute the transferable securities defined in the Law on Markets in Financial Instruments of the Republic of Lithuania (hereinafter referred to as the Law on Markets in Financial Instruments).
2. Section 2 of this Law shall also be applied to investment units or shares of closed-end collective investment undertakings. Section 3 of this Law shall also be applied to investment units or shares of closed-end collective investment undertakings allowed to be traded on a regulated market. Section 4 of this Law shall also be applied to shares of collective investment undertakings acting as a closed-end investment company allowed to be traded on a regulated market.
Article 4. Scope of Application
1. This Section of the Law shall define the requirements for the preparation, approval and publication of the prospectus to be complied by, where the securities of the issuer whose home Member State is the Republic of Lithuania, are intended to be offered publicly or admitted to trading on a regulated market in the Republic of Lithuania and/or other Member State. Where the home Member State of an issuer is other than the Republic of Lithuania the requirements set forth in this Section shall be complied with where the securities are intended to be offered publicly or admitted to trading on a regulated market of the Republic of Lithuania. An issuer in this Section shall also be a legal entity established in the Republic of Lithuania, proposing to issue or issuing its securities.
2. The requirements of this Section shall not be applied to:
2) non-equity securities to be issued (issued) by a Member State, its regional authorities, the European Central Bank, central banks of Member States, also public international organizations of which at least one Member State is a member;
4) securities unconditionally and irrevocably guaranteed by a Member State, its regional authorities;
5) non-equity securities issued in a continuous or repeated manner by credit institutions of Member States provided that such securities are not subordinated, convertible or exchangeable, do not give a right to subscribe to or acquire other types of securities and are not linked to a financial derivative, provided the securities materialize reception of repayable deposits, and are covered by a deposit insurance coverage;
6) publicly offered securities issued by an issuer incorporated in a Member State, provided the total consideration for the offer in the Member States is less than EUR 5 million calculated over a period of 12 months;
7) non-equity securities issued in a continuous and repeated manner by credit institutions incorporated in a Member State where the total consideration for the offer in the Member States is less than EUR 75 million calculated over a period of 12 months, provided that such securities are not subordinated, converted or exchangeable, do not give a right to subscribe to or acquire other types of securities and are not linked to a financial derivative;
3. Where in the cases referred to in Paragraphs 2, 4, 6, and 7 of Article 4(2) of this Law the securities are intended to be offered publicly or asked for admission to trading on a regulated market, the issuer, the offeror of securities or the person asking for admission to trading on a regulated market shall be entitled to draw up a prospectus.
4. For the purpose of this Section, the home Member State:
1) for the Community issuers of securities which are not referred to in Paragraph 3 hereof, shall be the Member State where the issuer has its registered office;
2) for the non-Community issuers of securities which are not referred to in Paragraph 3 hereof, shall be the Member State in which the securities were publicly offered for the first time after 11 November 2013, or intended to be offered, or where the first application for admission to trading on a regulated market is made. The home Member State shall be designated at the discretion of the issuer, the offeror of securities, or the person asking for admission to trading on a regulated market, and, if such option is not available or in case provided in Article 20(3) of this Law, - by taking into account a subsequent election by non-Community issuers;
3) for the issues of non-equity securities the denomination per unit of which amounts to at least EUR 1 000, also for the issues of non-equity securities giving the right to acquire any transferable securities or to receive a cash amount as a consequence of them being converted or the rights conferred by them being exercised, provided that the issuer of non-equity securities is not the issuer of the underlying securities and is not related to the issuer of the underlying securities—the Member State in which the issuer has the registered office or where the securities were or are to be admitted to trading on a regulated market, or where the securities are offered to the public. The home Member State shall be established at the choice of the issuer, the offeror of securities or the person asking for admission of its securities to trading on a regulated market. The same procedure shall also be applicable to non-equity securities in a currency other than EUR, provided that the minimum denomination of such security is not less than EUR 1 000.
Article 5. Obligation to Publish a Prospectus
1. The public offering of securities may be exercised in the Republic of Lithuania only after the issuer or the offeror of securities publishes the prospectus in the manner set forth in this Section.
2. The obligation to publish a prospectus shall not apply in the presence of at least one of the following conditions:
2) an offer of securities is addressed to fewer than 150 natural persons or legal entities per Member State, other than qualified investors 150;
3) an offer of securities is addressed to investors who acquire securities for a total consideration of at least EUR 100 000 for each separate offer;
3. In the cases referred to in Paragraphs 1 and 2 of Article 5(2) of this Law financial brokerage firms and credit institutions shall communicate their classification of investors as professional clients on request to the issuer without prejudice to the relevant legislation on data protection.
4. The obligation to publish a prospectus shall not apply in the presence of public offer of the following securities:
1) shares issued instead of previously emitted the same class shares provided that after the issue of such shares the issuer’s authorized capital does not increase;
2) securities offered as a payment instrument for securities purchased by way of the takeover bid where there is a document prepared according to a set procedure and available to future owners of such securities, which contains the information deemed by the supervisory authority as equivalent to the prospectus information to be provided on a mandatory basis;
3) securities offered, allotted or envisaged for allotment to companies after their merger, incorporation, division by acquisition, division by the formation of a new company or split off of new companies where there is a document approved according to a set procedure and available to future owners of such securities, which contains the information deemed by the supervisory authority as equivalent to the prospectus information to be provided on a mandatory basis;
4) shares paid for dividends to present shareholders (where shares are of the same class as shares for which such dividends are paid out) where a document containing the information about the offer, number and features of shares, as well as reasons and peculiarities of the offer is available to future owners of these shares;
5) securities offered, allotted or to be allotted to the issuer’s existing or former managers or employees by their employer or by an affiliated company provided that the company has its registered office in the Member State and provided that a document is made available to future owners of these securities containing information on the number and nature of the securities and the reasons for and details of the offer.
5. Subsequent sale of securities indicated in Article 5(2) of this Law shall be deemed as a separate offer and on the basis of the provision in Article 2(62) of this Law it is considered whether this offer may be treated as public. The placement of securities through financial intermediaries shall be subject to publication of a prospectus, where the final placement does not qualify for any of the exemptions specified in Article 5(2) of this Law.
6. The admission of securities to trading on a regulated market operating in the Republic of Lithuania shall be subject to the publication of a prospectus in the manner stipulated in this Section by the person seeking the admission of securities to trading on a regulated market.
7. An obligation to publish a prospectus shall not be applied when the following securities are admitted to trading in a regulated market:
1) shares whose number within 12 months comprises less than 10 percent of the number of the same class shares admitted to the same regulated market;
2) shares issued instead of previously admitted to the same regulated market the same class shares provided that after the issue of such shares the issuer’s authorized capital does not increase;
3) securities offered as a payment instrument for securities purchased by way of the takeover bid where there is a document prepared according to a set procedure and available to future owners of such securities and containing the information deemed by the supervisory authority as equivalent to the prospectus information to be provided on a mandatory basis;
4) securities offered, allotted or envisaged for allotment to companies after their merger, incorporation, division by acquisition, division by the formation of a new company or split off of new companies where there is a document approved according to a set procedure and available to future owners of such securities and containing the information deemed by the supervisory authority as equivalent to the prospectus information to be provided on a mandatory basis;
5) shares offered free of charge, allotted or envisaged for allotment to present shareholders, also shares paid for dividends (where shares given as dividends and shares for which such dividends are paid out are of the same class) where a document containing the information about the offer, number and features of shares, as well as reasons and peculiarities of the offer is available to future owners of these shares;
6) securities offered, allotted or envisaged for allotment to existing or former managers and employees of the issuer by their employer or a company belonging to the issuer’s group of entities, provided these securities are of the same class as securities admitted by the issuer to the same regulated market and there is a document containing the information about the number and features of securities, as well as reasons and peculiarities of the offer is available to future owners of these shares;
7) shares that occurred as a result of conversion or exchange of other securities or because of the implementation of the rights granted by other securities where these shares are of the same class as the shares that have already been admitted to the same regulated market;
8. The exception provided in Paragraph 8 of Article 5(7) may be used where the following requirements are complied with:
1) these securities or other the same class securities have been admitted to trading in the same regulated market for more than 18 months;
2) securities were admitted to trading in that regulated market for the first time after 31 December 2003 where before that date an approved prospectus which is an obligatory condition for the admission to trading in that regulated market, has been published in the procedure set in Article 14 of Directive 2003/71/EC;
3) securities, other than those indicated in Paragraph 2 hereof, were admitted to that regulated market for the first time after 30 June 1983 and their prospectus or other documents obligatory for the admission to trading in that regulated market were approved according to the requirements established in Directive 80/390/EEC or Directive 2001/34/EC;
4) conditions for admission to trading in a regulated market are satisfied and continuous duties set for issuers in that regulated market are fulfilled;
5) a person prepares and according to requirements set in this Law communicates to the public a summary note in the Lithuanian language;
9. The obligation to publish another prospectus shall not apply for any subsequent resale of securities or final placement of securities through financial intermediaries as long as a valid prospectus is available in accordance with Article 11 of this Law and the issuer or the person responsible for drawing up such prospectus consents to its use by means of a written agreement.
10. Paragraph 5 of Article 5(4) of this Law shall also apply to a company established outside the European Economic Area whose securities are admitted to trading either on a regulated market or on a third-country market. In the third country’s case, the exemption shall apply provided that adequate information (including the document referred to in Paragraph 5 of Article 5(4)) is available in English and provided that the European Commission has adopted a decision on the recognition of the equivalence of legal and supervisory system of the third-country market concerned.
Article 6. Drawing up of a Prospectus
1. The prospectus shall present the information on the issuer and its securities to be offered to the public or admitted to trading on a regulated market. The prospectus shall contain all information which, according to the particular peculiarities of the issuer and securities offered to the public or admitted to trading on a regulated market, is necessary to enable investors to make an informed assessment of the assets and liabilities, financial position, profit and loss, and prospects of the issuer and of any guarantor, and of the rights granted by such securities. The prospectus shall also include a summary that, in a concise and comprehensible manner provides key information. The prospectus must be of such a form that the information could be easily understood and analyzed.
2. Where the final price of a bid and the number of securities to be publicly offered cannot be specified in the prospectus:
1) the prospectus must specify the criteria and/or the terms and conditions for the establishment of the number and price or the maximal price of securities; or
2) an investor shall have a right, by applying in a simple written form to the person specifically indicated in the prospectus, to revoke the acquisition or subscription of securities not later than within 2 working days from notifying the supervisory authority and publicly announcing in the manner defined herein the final price and amount of the bid.
3. The supervisory authority may permit not to provide in the prospectus certain information the inclusion whereof in the prospectus shall be mandatory under the provisions of this Section and of Regulation (EC) No. 809/2004, when the supervisory authority has ground to believe that:
2) the disclosure of such information would be detrimental to the issuer provided that the omission of such information would not be likely to mislead the public with regard to facts and circumstances essential for assessment of the issuer, each guarantor or the offeror of securities, also the rights assigned by securities to which the prospectus relates; or
4. Upon the choice of the issuer, the offeror of securities or the person asking for admission to trading on a regulated market the prospectus may be drawn up as a single document or as several separate documents. The prospectus composed of separate documents shall contain the registration document, the securities note and the summary note. The information in the prospectus may be provided by way of reference. Where the prospectus relates to the admission to trading on a regulated market of non-equity securities having a denomination of at least EUR 100 000, requirement to provide a summary shall not apply, with the exception of events specified in Article 16(4) of this Law.
5. Where securities are guaranteed by a Member State, the issuer, the offeror of securities or the person asking for admission to trading on a regulated market, when drawing up a prospectus in accordance with Article 4(3) of this Law, shall be entitled to omit information about such guarantor.
Article 7. Key Information in a Prospectus
1. Key information of the prospectus shall mean the essential information on the nature of activities of the issuer and the guarantor as well as the nature of securities offered or admitted to trading on a regulated market, also the risk in connection to the issuer, the guarantor, and the securities presented to the investors in a comprehensible and clear manner and aimed at helping the investors to decide which offers should be taken into further consideration.
2. In light of the offer and securities concerned, the key information shall include the following elements:
1) a short description of the risk associated with the essential characteristics of the issuer and any guarantor, including the assets, liabilities and financial position;
2) a short description of the risk associated with the investment into securities and the essential characteristics of such investment, including the rights attaching to the securities;
3) general terms and conditions of the offer, including a fee to be charged to the investor by the issuer or the offeror of securities;
Article 8. Responsibility for Information Provided in a Prospectus
1. The responsibility for the correctness and completeness of the information presented in the prospectus shall attach to the issuer, the guarantor, the managers of the issuer, the offeror of securities and the person seeking admission to trading on a regulated market. Other persons maybe designated as responsible for the information presented in the prospectus apart from the mentioned persons and the bodies of the undertaking. The persons responsible shall be clearly identified in the prospectus: full name and position held by the natural person, name and registered office (address) of the legal entity. The declaration of responsible persons shall be attached to the prospectus to the effect that to their best knowledge the information contained in the prospectus is in accordance with the facts and that no material information has been omitted.
2. An investor who suffered damage due to inaccurate or incomplete information presented in the prospectus shall have a right to claim indemnity from the responsible persons in the manner stipulated in the Civil Code of the Republic of Lithuania (hereinafter referred to as the Civil Code). However, no civil liability shall arise against such persons when the investment decision has been made solely on the basis of the information presented in the summary of the prospectus (including the translation thereof), unless the summary of the prospectus, when read with other parts of the prospectus, is misleading, inaccurate, inconsistent or it does not provide, when read together with the other parts of the prospectus, key information referred to in Article 7 of this Law. The summary of the prospectus shall contain a clear warning to that effect.
3. Should the supervisory authority suspect that the information given in the prospectus is false or insufficient, it shall have a right to require that the issuer, the offeror of securities or the person applying for the approval of the prospectus, where the registered office of the issuer is outside the Community, submit a document specifying the persons responsible for the correctness and completeness of each item of the information presented in the prospectus, and signed by such persons, including consultants of the Republic of Lithuania involved in the drawing up of the prospectus or counseling the issuer, the offeror of securities or the person applying for the approval of the prospectus.
Article 9. Approval of a Prospectus
1. Only a prospectus approved by the supervisory authority or the competent authority of another Member State may be announced.
2. The supervisory authority shall notify of its decision concerning the approval of the prospectus or the refusal to approve the same the issuer, the offeror of securities or the person seeking the admission of securities to trading on a regulated market and the European Securities and Markets Authority not later than within 10 working days from the submission of the draft prospectus for approval. At the same time the supervisory authority shall furnish the European Securities and Markets Authority with a copy of the approved prospectus.
3. The time limit referred in Article 9(2) of this Law shall be extended to 20 working days where the securities intended for public offering have been issued (are issued) by the issuer who does not have any securities admitted to trading on a regulated market and who has not previously offered securities to the public.
4. Where within the time limit established by this Article the supervisory authority does not pass any decision, not later than within 10 working days as of the date of submission of draft prospectus for approval the issuer shall be informed of the reasons for not taking the decision and the prospectus shall be deemed not approved.
5. Where the supervisory authority finds that the documents submitted to it are incomplete or it has reasonable grounds to require additional information to be submitted, the supervisory authority shall not later than within 10 working days from the submission of the application to approve the prospectus notify the issuer, the offeror of securities or the person asking for admission to trading on a regulated market of its requirement to submit supplementary documents or information. The time limits established in Article 9(2) and (3) of this Law shall commence from the date of submission of any and all necessary documents and information.
6. The supervisory authority, having in advance notified the European Securities and Markets Authority and obtained prior consent from the supervisory authority of another Member State, shall have a right to transfer to it the right to approve the prospectus. The supervisory authority shall notify the issuer, the offeror of securities or the person asking for admission to trading on a regulated market of its decision to transfer the approval of the prospectus to the supervisory authority of another Member State not later than within 3 working days from the passing of the decision. The time limits established in Article 9(2) and (3) of this Law shall apply from the date of the decision by the supervisory authority to transfer the approval of the prospectus to the supervisory authority of another Member State.
7. Upon the receipt of the application to approve the prospectus the supervisory authority shall have a right to:
1) require that the issuer, the offeror of securities or the person asking for admission to trading on a regulated market submit in the prospectus the information necessary for the protection of investor interests;
2) require that the issuer, the offeror of securities or the person asking for admission to trading on a regulated market, as well controlling persons and persons controlled by them submit to the supervisory authority supplementary information and documents necessary for passing the decision concerning the approval of the prospectus;
3) require that the managers and auditors of the issuer, the offeror of securities or the person asking for admission to trading on a regulated market, also intermediaries executing the public offering of securities or applying for admission to trading on a regulated market submit to the supervisory authority supplementary information necessary for passing the decision concerning the approval of the prospectus.
8. The supervisory authority shall pass a decision concerning the approval of the prospectus having scrutinized the prospectus for its completeness, including the compatibility and comprehensiveness of the information given therein. The approval of the prospectus shall mean that the information submitted in the prospectus is in accordance with the requirements for the submission of information established in this Law and other legal acts governing public offering of securities and/or the admission of securities to trading on a regulated market, however, it shall not be deemed the confirmation of the correctness of the information and shall not be considered the recommendation of the supervisory authority to investors.
9. The supervisory authority shall not approve the prospectus, where:
1) the issuer has provided the information not in compliance with the rules on the submission of information established by Article 9(8) of this Law;
2) the issuer failed to provide the documents or explanations stipulated by the supervisory authority or it was established that the documents or information were false;
Article 10. Publication of a Prospectus
1. The issuer, the offeror of securities or the person asking for admission to trading on a regulated market shall furnish the approved prospectus to the supervisory authority and publish the prospectus without delay not later than until the commencement of public offering of securities or the date of admission to trading on a regulated market. Having published the prospectus the issuer, the offeror of securities or the person asking for admission to trading on a regulated market shall without delay post such prospectus into the Central Storage Facility in the manner defined in Article 33 of this Law.
2. The prospectus shall be deemed available to the public when published either:
1) in at least one newspaper of national circulation in case the public offer shall be executed or the admission to trading in the regulated market of the Republic of Lithuania is sought; or
2) in the form of a brochure handed out free of charge the registered office of the operator of the market on which the securities will be traded or in the registered office of the issuer and the offices of intermediaries of public trading in securities (including the paying agents) placing or selling the securities to all persons wishing to receive such brochure; or
3) in an electronic form on the website of the issuer or the websites of intermediaries (including the paying agents) placing or selling the securities; or
3. Where the prospectus is published in the manner specified in Paragraph 1 or 2 of Article 10(2) of this Law, the prospectus shall be additionally published electronically in the manner stipulated in Paragraph 3 of Article 10(2) of this Law. A hard copy of the electronically published prospectus shall be at no charge handed out to the investor, if he so requests. A copy of the prospectus shall be submitted by the issuer, the offeror of securities or the person seeking admission to trading on a regulated market, or the intermediaries selling or otherwise placing the securities.
4. The supervisory authority shall furnish on its website the list of the prospectuses approved during the last 12 months.
5. In case of a prospectus comprising several documents and/or incorporating information by reference, the documents and the information making up the prospectus may be published and circulated separately provided that all the documents and the information making up the prospectus are made available to the public free of charge, in the manner stipulated in Article 10(2) and (3) of this Law. Each separately published document must indicate where the other constituent documents of the full prospectus may be obtained.
Article 11. Validity of a Prospectus and Supplement to a Prospectus
1. The prospectus shall remain in effect for a period of 12 months after its approval provided all conditions stipulated in Article 11(2) of this Law are complied with.
2. Every significant new factor, material mistake or inaccuracy related to the information included in the prospectus and capable of affecting the assessment of the securities concerned and which arise or are noted between the time when the prospectus is approved and the final closing of the offer to the public, or the beginning of trading on a regulated market, whichever occurs later, shall be specified in the supplement to the prospectus. Supplement to the prospectus shall be approved in the same way as the prospectus itself, however, not later than within 7 working days from the submission of all documents required for taking a decision on the approval of supplement to the prospectus, and it shall be published in the same way as the prospectus itself. The summary of the prospectus, including the translation thereof, shall also be supplemented if necessary to take into account the new information included in the supplement. Investors who have already agreed to purchase or subscribe to the securities before the supplement is published, shall have the right, exercisable within 2 working days after publication of the supplement to the prospectus, to withdraw its acceptance, provided that the new factor, mistake or inaccuracy arose before the final closing of the offer to the public and the delivery of the securities. That period may be extended by the issuer or the offeror but the final date of the right of withdrawal shall be stated in the supplement of the prospectus. The issuer and the offeror of securities shall repay contributions of the investors within 10 working days without any deductions made.
3. The supervisory authority shall, in the manner stipulated in Article 9(2) of this Law, notify the issuer, the offeror of securities or the person applying for admission to trading on a regulated market, and the European Securities and Markets Authority about the adopted decision regarding the approval of the supplement to the prospectus. The supervisory authority shall at the same time submit to the European Securities and Markets Authority a copy of the supplement to the approved prospectus.
Article 12. Advertising of Securities
1. Any type of advertisements relating either to the offer to the public of securities or an admission thereof to trading on a regulated market shall be performed only in the observance of the principles defined in Article 12(2-6) of this Law. The requirements defined in Article 12(2-5) of this Law shall be mandatory in the cases the publication of the prospectus is mandatory.
2. Advertisements shall be clearly recognizable as such. Advertisements shall state that a prospectus has been or will be published and indicate where investors are or will be able to obtain it.
3. The information contained in an advertisement shall be accurate and not misleading. The information shall also be consistent with the information contained in the prospectus (if already published) or with the information required to be published in the prospectus (if the prospectus is to be published afterwards).
4. All information concerning the offer to the public or the admission to trading on a regulated market disclosed in an oral or written form must be consistent with that contained in the prospectus, regardless of the fact whether or not such information was disclosed for advertising purposes.
5. Where the issuer or the offeror of securities submits relevant information to qualified investors or special categories of investors (including the information disclosed at the meetings related to the offering of securities), such information shall be included into the prospectus or the supplement to the prospectus in the manner defined by the supervisory authority.
6. When according to this Law or the regulations approved by the supervisory authority no prospectus is required, and the issuer or the offeror of securities submits relevant information to the persons referred to Article 12(5) of this Law, such information shall be disclosed to any and all persons specified in Article 12(5) of this Law on equal terms.
7. The control over the compliance with these requirements shall be exercised by supervisory authority. Where the supervisory authority has grounds to suspect the violation of the provisions of this Article, it shall suspend the advertising and set a reasonable time limit not exceeding 10 working days for the elimination of the said violations or for carrying-out of other actions required for the elimination of such violations. Where the violations are not eliminated or other instructions of the supervisory authority are not complied with within the set time limit, the supervisory authority shall prohibit the advertising of securities.
Article 13. Peculiarities of the Public Offering and Admission to Trading on a Regulated Market of Securities Executed in another Member State by the Issuer Established in the Republic of Lithuania
1. Upon the receipt of the request of the issuer or the person responsible for the drawing up of the prospectus to offer the securities to the public or seek admission to trading on a regulated market in another Member State, the supervisory authority shall, not later than within 3 working days following the request, if submitted together with the approved prospectus, or not later than on the next working day after the approval of the prospectus, if the request is filed with the draft prospectus, provide a copy of the prospectus to the supervisory authority of the host Member State and a certificate regarding the approval of the prospectus attesting that the prospectus has been drawn up in accordance with the legal requirements to the supervisory authority of the host Member State and the European Securities and Markets Authority. Where legal acts of the host Member State stipulate that a translation of the summary prospectus must be provided, the supervisory authority shall additionally provide the supervisory authority of the Member State with the translation of the summary prospectus prepared by the issuer or another person responsible for the drawing up of the prospectus, as well as the supplement to the prospectus, in case of an obligation, under this Law, to provide the supplement of the prospectus. The issuer or the person responsible for drawing up the prospectus shall also be notified of the certificate of approval at the same time as the supervisory authority of the host Member State.
Article 14. Public Offering and Admission to Trading on a Regulated Market in the Republic of Lithuania of Securities Issued by an Issuer whose Home Member State is other than the Republic of Lithuania
1. Securities issued by an issuer whose home Member State is other than the Republic of Lithuania may be offered to the public or admitted to trading on a regulated market in the Republic of Lithuania only after the supervisory authority of the home Member State provides the supervisory authority with a copy of the prospectus and the certificate of approval attesting that the prospectus has been drawn up in accordance with the requirements of the legal acts of the home Member State.
2. In case the prospectus has been drawn up in a language other than Lithuanian, the translation of the summary prospectus into Lithuanian shall be submitted together with the prospectus and its certificate of approval, as well as the supplements to the prospectus in case of an obligation, under legal acts of the home Member State, to provide the supplements to the prospectus.
3. Where the supervisory authority determines that the issuer or the financial institutions responsible for the public offering of securities have violated the requirements applied to the issuers whose securities are publicly offered or admitted to trading on a regulated market, it shall immediately notify of the established violations the home Member State of the issuer as well as the European Securities and Markets Authority. Where the issuer or the financial institution responsible for the public offering of securities, disregarding the sanctions imposed by the supervisory authority of the home Member State, continues to violate the requirements set forth in this Law and other legal acts governing public offering and admission of securities to trading on regulated markets, or it becomes evident that the imposed sanctions were not sufficient, the supervisory authority, having in advance notified the supervisory authority of the home Member State and the European Securities and Markets Authority thereof, takes all the necessary measures to protect the interests of investors. The supervisory authority shall without delay notify the European Commission and the European Securities and Markets Authority of the measures that have been undertaken.
4. The supervisory authority shall publish on is website the list of the prospectuses obtained in accordance with this Article and of the certificates of approval of all supplements thereto, as well as, where applicable, the internet reference to these documents published on the website of the supervisory authority of the home Member State, the issuer or the regulated market. The published list of prospectuses and of the certificates of approval of supplements thereto shall be constantly updated and each record shall be retained on the website for not less than a year.
Article 15. Issuers Established in Non-Member States
1. The supervisory authority shall have a right to approve the prospectus concerning the public offering of securities or the admission to trading on a regulated market of securities of the issuer whose registered office is located in a non-Member State and, for the purpose of Article 4(4) of this Law, the home Member State is the Republic of Lithuania, where the prospectus has been prepared in accordance with the requirements of the legal acts of the issuer‘s home State, provided that:
1) the prospectus has been drawn up in accordance with the international standards approved by the international organizations of securities commissions, including the Disclosure Standards approved by the International Securities Commission Organization (IOSCO);
2. Where the securities issued by the issuer referred to in Article 15(1) of this Law are publicly offered or admitted to trading on a regulated market in one or several Member States, or one or several Member States except the Republic of Lithuania, the requirements of Articles 13 and 16 of this Law must be met.
Article 16. Language of the Prospectus of the Issuer whose Home Member State is the Republic of Lithuania
1. Where the securities are offered publicly or admission to trading on a regulated market is sought in the Republic of Lithuania only, the prospectus shall be drawn in the Lithuanian language. Upon the request of the issuer, the offeror of securities or the person applying for admission to trading on a regulated market for permission to draw up the prospectus in the English language and having assessed that the interests of investors would be safeguarded the supervisory authority may allow to draw up the prospectus in the English language. In case the prospectus is drawn up in the English language, additionally the summary prospectus shall be provided in the Lithuanian language.
2. Where the securities are offered publicly or admission to trading on a regulated market is sought in one or several Member States except the Republic of Lithuania the prospectus upon the choice of the issuer, the offeror of securities or the person applying for admission to trading on a regulated market shall be drawn up in the language acceptable to supervisory authorities of the home Member States or the English language. The prospectus submitted for approval to the supervisory authority shall be at the discretion of the issuer, the offeror of securities or the person asking for admission to trading on a regulated market prepared in the Lithuanian or English language.
3. Where the securities are offered publicly or admission to trading on a regulated market is sought in the Republic of Lithuania and one or several Member States the prospectus submitted to the supervisory authority for approval must be drawn up in the Lithuanian or English language. In the event the prospectus is drawn up in the Lithuanian language, the translation of the prospectus shall be submitted, upon the choice of the issuer, the offeror of securities or the person seeking admission to trading on a regulated market into the language acceptable to the supervisory authority of each host Member State or the English language. In case the prospectus is drawn up in the English language, additionally the summary prospectus shall be provided in the Lithuanian language.
4. In case admission to trading on a regulated market in one or several Member States is sought in respect of non-equity securities the denomination per unit of which is not less than EUR 100 000, upon the choice of the issuer, the offeror of securities or the person seeking admission to trading on a regulated market, the prospectus must be drawn up in the language of the home Member State and the language acceptable to the supervisory authorities of the host Member States or in the English language. Where the said securities are admitted to trading on a regulated market in the Republic of Lithuania, additionally the summary prospectus shall be provided in the Lithuanian language.
Article 17. Primary Trading in Securities
1. The primary trading in securities shall be conducted where the issuer offers the securities himself or under agreements with intermediaries. The securities may also be offered by means of the organizational-technical measures of the operator of the regulated market and/or the settlement system in accordance with the rules approved by the supervisory authority.
2. In the course of the primary trading in securities all persons belonging to the same group of investors entitled to acquire securities shall be ensured equivalent terms in respect of the acquisition of securities. Each investor shall be provided with a possibility to familiarize with the approved and published prospectus.
3. In the course of offering of securities the procedure, the payment procedure and the time limits for the offering of securities may be modified only with the authorization of the supervisory authority. In this case the supplement of the prospectus shall be approved and published. It shall be prohibited to modify the price, denomination, class and type of the issue of securities.
4. All requirements of the primary trading of securities shall also apply in the situation where the offering is executed by an intermediary for the securities acquired from the issuer under a firm commitment underwriting agreement.
Article 18. The Secondary Trading in Securities
The secondary trading in securities in the Republic of Lithuania shall be conducted in accordance with the provisions of the Law on Markets in Financial Instruments.
Article 19. Publishing of Information on Material Events
1. An issuer whose securities have been admitted to trading on a regulated market of the Republic of Lithuania must, in the manner prescribed in legal acts governing the protection of confidentiality and disclosure of publicly undisclosed information adopted by the supervisory authority, immediately, but not later than within 24 hours, submit an information notice on each material event, with the exception of events specified in Article 19(2) of this Law, to the operator of the regulated market at which the securities issued thereby are traded, make the said notice public, and post it in the Central Storage Facility as well as on its own website in the manner prescribed in Article 33 of this Law, with the exception of the case provided for in Article 19(2) of this Law. The notification notice must specify the nature of the event and provide its brief description.
2. If disclosure of the information on a material event referred to in Article 19(1) of this Law may inflict financial or competition-related damage on the issuer, and the non-disclosure of such information does not mislead the public and the issuer is able to ensure the confidentiality of such information, it may not publish this information and submit it only to the supervisory authority with a mark “Confidential information”. The issuer shall also provide a written explanation of the reasons for considering the information to be confidential and specify therein the date until which the information must remain confidential. On the next working day as of the expiration of confidentiality of the information such information shall be disclosed in the manner prescribed in legal acts governing the protection of confidentiality and disclosure of publicly undisclosed information adopted by the supervisory authority. The supervisory authority shall oblige the issuer to publish the information on a material event before the date of disclosure of the information, as set by the issuer, if:
3. The operator of the regulated market shall establish the procedure for disclosing the information on material events to be applied to the issuers whose securities are admitted to trading on that regulated market.
Article 20. Scope of Coverage
1. The requirements for the disclosure of periodic and current information provided for in this Section of the Law shall apply to issuers whose home Member State is the Republic of Lithuania. Where the home Member State of the issuer is not the Republic of Lithuania, the requirements of this Section shall be complied with in the cases where the securities of the issuer have been admitted to trading on a regulated market only in the Republic of Lithuania.
2. For the purpose of this Section the home Member State shall be:
1) for Community issuers of equity securities and non-equity securities the denomination per unit of which is less than EUR 1 000 – the Member State in which the issuer has its registered office;
2) for non-Community issuers of equity securities and non-equity securities the denomination per unit of which is less than EUR 1 000 – the Member State, in which the issuer’s securities have been admitted to trading on a regulated market. The home Member State shall be selected by the choice of the issuer. The issuer’s choice shall expire, if a new home Member State is selected in accordance with Article 20(3) and given notice of accordingly in accordance with Article 20(5), on the date specified in the issuer’s notice;
3) for the issuers not referred to in Paragraphs 1 and 2 of Article 20(2) of this Law – the Member State where the issuer has its registered office or in which the securities of the issuer have been admitted to trading on a regulated market. The home Member State shall be selected by the choice of the issuer. The issuer may choose only one Member State which shall be considered its home Member State for not less than 3 consecutive years, except the cases where the securities of the issuer are no longer traded on a regulated market or where during such period of 3 years the issuer starts meeting the requirements of Paragraph 1 or 2 of Article 20(2). The issuer’s choice shall expire, if a new home Member State is selected in accordance with Article 20(3).
Note of the Register of Legal Acts. The issuer specified in Paragraphs 2 and 3 of Article 20(2), the securities whereof have been admitted to trading on a regulated market in a Member State before the enactment of this Law (No. XII-2074) (04/12/2015), shall notify of his selected home Member State until 27 February 2016 in the manner prescribed in Article 20(5).
3. Where the securities of the issuer are no longer traded on a regulated market of the home Member State, the issuer specified in Paragraphs 2 and 3 of Article 20(2) shall select a new home Member State from the Member States, where the securities of the issuer are admitted to trading on a regulated market, and the Member State, where the issuer has his registered office.
4. Issuers established in non-Member States whose home Member State is not the Republic of Lithuania must disclose the periodic and current information in accordance with the procedure established in this Section where the securities of such issuers are publicly offered or admitted to trading on a regulated market in the Republic of Lithuania. The supervisory authority shall have a right not to apply to an issuer whose registered office is in a non-Member State the requirements of this Section where the periodic and current information has been prepared and disclosed in accordance with the requirements of the legal acts of the state where the issuer has its registered office, which by a decision of the supervisory authority shall be considered equivalent to the requirements stipulated in this Section. In that case, the supervisory authority shall notify the European Securities and Markets Authority of the derogation applied.
5. The issuers shall notify the supervisory authorities of the Member State, where the issuer has his registered office, the home Member State or the host Member States of the home Member State selected by him in accordance with Article 20(2 or 3) and publish the same in the manner prescribed in Articles 31 and 33 of this Law. If within 3 months as of the moment of the admittance of securities to trading on a regulated market the issuer fails to duly notify of and publish his selection of the home Member State, after the expiry of this time limit, the home Member States shall be deemed to be all Member States, where the regulated markets operate and where the issuer’s securities are admitted to trading, until the issuer selects one home Member State and publishes the same in the manner prescribed in Articles 31 and 33 of this Law.
6. The requirements of this Section shall not apply to securities to be issued (issued) by open-type collective investment undertakings.
Article 21. Disclosure of Periodic Information
1. Issuers in the manner established by the supervisory authority shall draw up, make public, and post in the Central Storage Facility the following periodic information:
2. The requirement to draw up the semi-annual information shall apply to issuers whose securities are admitted to trading on a regulated market.
3. The obligation stipulated in Article 21(1) of this Law shall not apply to the issuers:
1) who have issued non-equity securities admitted to trading on a regulated market the denomination per unit of which is not less than EUR 100 000;
2) Member States, their regional authorities, the European Central Bank, the European Financial Stability Facility established under the European Financial Stability Facility (EFSF) Framework Agreement, and other mechanisms established in order to maintain the financial stability of the European Economic and Monetary Union in lending temporary financial support to the Member States, whose currency is the euro, central banks of Member States and public international bodies of which at least one Member State is a member;
4. The obligation to draw up the semi-annual information referred to in Article 21(1) of this Law shall not apply to credit institutions whose shares are not admitted to trading on a regulated market and which have, in a continuous or repeated manner issued non-equity securities only provided that the total nominal amount of all such securities remains below EUR 100 million and they have not published the prospectus.
5. The requirements established in Article 33 of this Law shall apply to the publication and storage of information in the central storage facility. The issuer shall enable each owner of securities issued by him to gratuitously familiarize with the periodic information referred to in this Article and make copies of periodic information at such owner’s request. A fee established in the articles of association of the issuer may be charged from the copies of periodic information, which shall not exceed the document filing costs.
6. The responsibility for the completeness and correctness of the information referred to in Article 21(1) of this Law shall lie with the issuer and the managers of the issuer. Apart from these persons or managements bodies of the company other persons may be held responsible for the periodic information. The documents of periodic information shall clearly identify the responsible persons: full name and position held of the natural person, name and the registered office (address) of the legal entity.
Article 22. Annual Information
1. The annual information shall be comprised of the audited annual financial statements, audited annual report and the representation of the responsible persons that, to the best of their knowledge, the annual financial statements prepared in accordance with the applicable accounting standards are truthful and give a true and fair view of the issuer’s assets, liabilities, financial position, profit or loss, and cash flows, and the annual report includes a fair review of the development and performance of the business and the position of the issuer and includes a description of the main risks and contingencies faced by the issuer.
2. If the issuer must draw up audited annual consolidated financial statements, the annual information shall be comprised of the audited annual consolidated financial statements, audited consolidated annual report and the confirmation of the persons in charge that, to the best of their knowledge, the annual consolidated financial statements drawn up in accordance with the applicable accounting standards are truthful and give a true and fair view of the group’s assets, liabilities, financial condition, profit or loss, and cash flows, and that the consolidated annual report includes a fair review of the development and performance of the business and the condition of the issuer and the group of undertakings together with a description of the main risks and contingencies faced by the issuer and the group of undertakings, also the audited annual financial statements of the parent undertaking together with the confirmation made by the persons in charge as well as the annual report of the parent undertaking. When preparing an annual consolidated report, the annual report of the parent undertaking may be combined with the consolidated annual report.
3. The annual report of the issuer whose securities are admitted to trading on a regulated market operating in the Republic of Lithuania shall contain a notification that the issuer complies with the Code of Governance of the companies whose securities are traded on a regulated market approved by the operator of the regulated market concerned. In the event the Code of Governance or certain provisions thereof are not complied with the annual report shall specify which provisions are not complied with and for what reasons.
4. The annual information together with the auditor’s report signed by a person or persons responsible for the audit must be made public and submitted to the supervisory authority not later than within 4 months from the end of the financial year.
5. The accounting of the issuers established in the Republic of Lithuania must be managed, and their annual financial statements and annual consolidated financial statements must be drawn up in observance of the requirements for accounting and financial reporting established by legal acts of the Republic of Lithuania. The annual financial statements and annual consolidated financial statements of issuers established in Member States must be drawn up in observance of the requirements of the national legal acts of the Member State where the issuer has been established. The annual financial statements and annual consolidated financial statements of the issuers established in non-Member States must be drawn up in observance of the international accounting standards or the universally accepted accounting principles.
Article 23. Semi-Annual Information
1. The semi-annual information shall include a set of financial statements of the first 6 months of the financial year (hereinafter referred to as the Semi-Annual Financial Statements), a semi-annual report, and the representation made by the responsible persons that, to the best of their knowledge, the semi-annual financial statements prepared in accordance with the applicable accounting standards are truthful and give a true and fair view of the assets, liabilities, financial condition, profit or loss, and cash flows of the issuer, and the semi-annual report includes a fair review of the development and performance of the business and the position of the issuer and includes a description of the main risks and contingencies faced by the issuer.
2. Where the issuer must draw up a set of consolidated financial statements, the semi-annual information shall include a set of consolidated financial statements of the first 6 months of the financial year (hereinafter referred to as the Semi-Annual Consolidated Financial Statements), a consolidated semi-annual report, and the confirmation made by the persons in charge that, to the best of their knowledge, the semi-annual consolidated financial statements prepared in accordance with the applicable accounting standards are truthful and give a true and fair view of the assets, liabilities, financial condition, profit or loss, and cash flows of the group of undertakings, and that the consolidated semi-annual report includes a fair review of the development and performance of the business and the condition of the issuer and the group of undertakings together with a description of the main risks and contingencies faced by the issuer and the group of undertakings.
3. The semi-annual information shall be published immediately after the end of the first 6 months of the financial year, but not later than within 3 months after the end of such period. In the event an audit of semi-annual financial statements and/or semi-annual consolidated financial statements or the review of financial statements has been conducted, the semi-annual information shall be made public together with the auditor’s report or the conclusion of the review. If the audit of semi-annual financial statements or the review of financial statements is not conducted, the issuer shall indicate the same in his semi-annual financial statement.
4. The accounting of issuers established in the Republic of Lithuania must be managed and semi-annual financial statements as well as semi-annual consolidated financial statements must be prepared in observance of the requirements for accounting and financial reporting established by legal acts of the Republic of Lithuania. The semi-annual financial statements and semi-annual consolidated financial statements of issuers established in Member States must be drawn up in observance of the requirements of the national legal acts of the Member State where the issuer has been established. The semi-annual financial statements and semi-annual consolidated financial statements of issuers established in non-Member States must be drawn up in observance of the international accounting standards or the universally accepted accounting principles. In the event that semi-annual financial statements and semi-annual consolidated financial statements have been drawn up not in observance of the international accounting standards, semi-annual financial statements and semi-annual consolidated financial statements must comprise at least an abbreviated balance sheet, an abbreviated profit and loss account, and an explanatory note.
Article 24. Interim Information
1. The interim information shall be drawn up by the choice of the issuer. If the issuer chooses to draw up an interim information and/or consolidated interim information, he shall disclose the same according to the procedure for publishing of information on material events established in Article 19 of this Law. Interim information and/or consolidated interim information shall be disclosed immediately, but not later than within 2 months as of the end of the reporting period in the manner prescribed in Article 33 of this Law. In the event an audit of a set of interim financial statements (hereinafter referred to as the Interim Financial Statements) and/or a set of interim consolidated financial statements (hereinafter referred to as the Interim Consolidated Financial Statements) or the review of financial statements has been conducted, the interim information shall be made public together with the auditor’s report or the conclusion of the review.
2. The interim information shall include the interim financial statements of 3, 9 and 12 months and the representation made by the responsible persons that, to the best of their knowledge, the interim financial statements prepared in accordance with the applicable accounting standards are truthful and give a true and fair view of the assets, liabilities, financial condition, profit or loss, and cash flows of the issuer.
3. Where the issuer draws up the interim consolidated financial statements, the interim information shall include interim consolidated financial statements of 3, 9 and 12 months and the confirmation made by the persons in charge that, to the best of their knowledge, the interim consolidated financial statements prepared in accordance with the applicable accounting standards are truthful and give a true and fair view of the assets, liabilities, financial condition, profit or loss, and cash flows of the group of undertakings.
4. The accounting of issuers established in the Republic of Lithuania must be managed and interim financial statements as well as interim consolidated financial statements must be prepared in observance of the requirements for accounting and financial reporting established by legal acts of the Republic of Lithuania. The interim financial statements and interim consolidated financial statements of issuers established in Member States must be drawn up in observance of the requirements of the national legal acts of the Member State where the issuer has been established. The interim financial statements and interim consolidated financial statements of issuers established in non-Member States must be drawn up in observance of the international accounting standards or the universally accepted accounting principles. In the event that interim financial statements and interim consolidated financial statements have been drawn up not in observance of the international accounting standards, interim financial statements and interim consolidated financial statements must comprise at least an abbreviated balance sheet, an abbreviated profit and loss account, and an explanatory note.
Article 25. Obligation to Inform about Acquisition or Disposal of a Holding
1. A person who has acquired 5, 10, 15, 20, 25, 30, 50, 75 and 95 percent of votes at the general meeting of shareholders of an issuer must immediately, but not later than within 4 trading days, inform the supervisory authority and the issuer about the total amount of votes. This obligation shall also be binding where the specified limits are exceeded in the descending order where votes are disposed of at the general meeting of shareholders of the issuer.
2. The obligation provided for in Article 25(1) of this Law shall arise on the day when the person finds out about the acquisition or disposal of a fixed amount of votes or, depending on circumstances, is supposed to learn about it.
3. The obligation provided for in Article 25(1) of this Law shall not be binding upon an undertaking belonging to a group of undertakings obliged to draw up annual consolidated financial statements, if a respective notification is submitted to the supervisory authority by the undertaking’s parent undertaking or by the parent undertaking of the latter.
4. The obligation provided for in Article 25(1) of this Law shall not be binding upon a person who acquires the securities of the issuer only for the purposes of the mid-accounting or the settlement during the regular short-term settlement cycle. The maximum possible short-term accounting cycle shall be 2 trading days from the conclusion of a transaction.
5. The obligation provided for in Article 25(1) of this Law shall not be binding upon account managers registered in Member States and third countries who, acting as account managers, in the general meeting of shareholders of the issuers have a right to vote in respect of the votes attached to shares only following the instructions of the customers submitted in writing or by electronic means.
6. The obligation provided for in Article 25(1) of this Law shall not be binding upon a market maker who performing the activity of the market maker is not involved in the management of the issuer in whose general meeting of shareholders he acquired or disposed of 5 percent of votes or the votes above such threshold, and due to such acquisition or maintaining of the price does not affect the issuer. The market maker shall within 4 trading days notify the supervisory authority of the use of such exemption.
7. The scope established in Article 25(1) of this Law shall not include voting rights entered into the trading books of credit institution or financial brokerage firm, as it is defined in Article 4(86) of Regulation (EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/2012 (OJ 2013 L 176, p. 1), if voting rights in the trading book do not exceed 5 percent limit and voting rights granted by shares entered in the trading book are not exercised in voting or participating otherwise in the management of the issuer.
8. The scope established in Article 25(1) of this Law shall not include voting rights granted by shares acquired for stabilization purposes under the Commission Regulation (EC) No. 2273/2003 of 22 December 2003 implementing Directive 2003/6/EC of the Parliament and of the Council as regards exemptions for buy-back programs and stabilization of financial instruments (OJ 2004 special edition, chapter 6, volume 6, p. 342) (hereinafter referred to as the Regulation (EC) No. 2273/2003) provided that voting rights granted by such shares are not used in voting or participating otherwise in the management of the issuer.
9. The issuer shall, within 3 trading days from the receipt of the notification specified in Article 25(1) of this Law, communicate to the public in the manner stipulated in Article 33 of this Law the information provided in the notification and upload such information into the Central Storage Facility.
10. A person who fails to fulfill the obligation specified in Article 25(1), Article 27(1), or Article 28(1) of this Law within an established period of time shall not, for the period until the proper disclosure of the data concerned, have the right to use votes held by him at the general meeting of shareholders of such issuer. Moreover, all decisions adopted during the period between the acquisition of the holding and the moment of a proper disclosure of the information may be annulled by an appeal of the issuer’s shareholders, if such decisions had resulted in a replacement of the issuer's managers or property or non-property rights of shareholders have been violated.
Article 26. Procedure for the Calculation of Votes Held by a Person
1. For the purpose of this Law, votes held by a person shall be deemed to be the rights to vote that:
1) are granted to a person by shares held thereby by the right of ownership (except where they are pledged as a security and the pledge agreement provides for the voting rights transfer to the security holder);
2) are held by another person with whom that person has concluded a voting agreement concerning the implementation of the corporate management policy;
3) are held by another person with whom he had concluded a provisional agreement on the transfer of the voting rights;
4) are granted by shares that have been pledged or transferred as a financial security provided the security holder is authorized to use the voting rights attaching to the shares;
5) are granted by shares which he as an usufruct is authorized to use all his life or a determined period of time that may not be longer than the duration of the person’s lifespan;
7) are granted by the shares transferred to him by trust or otherwise deposited to him where the person, in the absence of other instructions, may exercise the voting rights at his own discretion;
9) may be used by the person at its own discretion under an authorization or under other agency basis;
2. The manager of the issuer shall be considered to be holding votes of other managers of the issuer if the supervisory authority, having considered evidence submitted by the manager of the independence of his actions, has not resolved otherwise.
3. The voting rights shall be calculated by taking into account all voting shares of the same class even where the usage of such rights has been suspended.
4. Paragraph 4 of Article 26(1) and Article 25 of this Law shall not apply to members of the Central European Bank system performing monetary functions, also effecting pledge, repurchase or other equivalent liquidity transactions within the payment system or for the monetary policy purposes. This exclusion shall apply to short-term transactions provided the rights attaching to the shares are not exercised.
5. The voting rights of a management company held in accordance with this Article and Article 25 of this Law shall not be required to be aggregated with the voting rights attaching to the shares managed by the management company under the Law on the Collective Investment Undertakings of the Republic of Lithuania (hereinafter referred to as the Law on the Collective Investment Undertakings) where such management company uses the voting rights independently from the parent undertaking. This exemption shall not apply where the parent undertaking or the subsidiary undertaking of the parent undertaking has invested into the holding of the management company and the management company has no discretion to exercise the voting rights attached to such holdings, and may only exercise such voting rights under direct or indirect instructions from the parent undertaking or the subsidiary undertaking of the parent undertaking.
6. The voting rights of the parent undertaking of a financial brokerage firm held in accordance with this Article and Article 25 of this Law shall not be required to be aggregated with the voting rights held by the financial brokerage firm and attaching to the shares managed on behalf of the clients in accordance with the Law on Markets in Financial Instruments, where:
1) the financial brokerage firm has a right to provide the financial instrument portfolio management service provided for in Paragraph 4 of Article 3(13) of the Law on Markets in Financial Instruments; and
2) the financial brokerage firm has a right to exercise the voting rights attached to such shares under written or electronically submitted instructions of the customers; and
7. The exemption stipulated in Article 26(6) of this Law shall not apply where the parent undertaking or the subsidiary undertaking of the parent undertaking has invested into the holding of the financial brokerage firm, and the financial brokerage firm has no discretion to exercise the voting rights attached to such holding, and may only exercise such voting rights under direct or indirect instructions from the parent undertaking or the subsidiary undertaking of the parent undertaking.
Article 27. Obligation to Inform about Acquisition or Disposal of the Package of Financial Instruments Granting a Voting Right, other than Shares
1. The obligation to inform provided for in Article 25(1) of the Law shall apply mutatis mutandis to persons, who directly or indirectly hold financial instruments, which at maturity of the buy-up term in accordance with the official agreement grant a right or an opportunity to acquire already issued shares of the issuer, which grant voting rights, or financial instruments related to the said financial instruments and having a similar economic effect.
2. Financial instruments grouped by the type shall be specified in the notice. Financial instruments, which at maturity of the buy-up term in accordance with the official agreement grant a right or an opportunity to acquire already issued shares of the issuer, and financial instruments related to the said financial instruments and having a similar economic effect shall be specified individually. Financial instruments, which grant a right to settlement in securities, and financial instruments, which grant a right to settlement in cash only, shall be specified individually.
3. For the purpose of this Article, financial instruments shall be deemed to be the following instruments:
Article 28. Notice of Shares and other Financial Instruments
1. Notice referred to in Article 25(1) of this Law shall also be given in cases, where total available number of votes granted by shares and by directly or indirectly held financial instruments reaches the limits established in Article 25(1) of this Law, exceeds them in the ascending or the descending order, upon respective acquisition or disposal of shares and/or directly or indirectly held financial instruments.
2. A repeat notice shall be given of voting rights granted by the financial instruments, which have already been given notice of, if a person acquires shares in connection to such rights and total number of voting rights as a result of such acquisition reaches or exceeds the limits established in Article 25(1) of this Law.
Article 29. Obligation of the Issuer to Notify an Acquisition or Disposal of Own Shares and Publish Additional Information
1. The issuer, himself or via another person acting in his own name but on the issuer's behalf, having acquired or transferred 5 or 10 percent of own shares shall not later than within 4 trading days announce in the manner described in Article 33 of this Law, post into the Central Storage Facility, and notify the supervisory authority of the relative number of the shares held thereby. This obligation shall also be binding where the specified limits are exceeded in the descending or the ascending order. The relative number of shares shall be calculated having regard to the total number of shares to which the voting rights attach.
2. In order to be able to calculate the limits established in accordance with Article 29(1) of this Law the issuer shall without delay and in any case not later than within 3 working days, in the manner stipulated in Article 33 of this Law, publish and post in the Central Storage Facility, inform the supervisory authority and publish on its website the total voting rights granted by the shares issued thereby and the amount of the authorized capital, number of shares and the denomination thereof.
3. The issuer of equity securities shall without delay, in the manner stipulated in Article 33 of this Law, publish and post in the Central Storage Facility, also inform the supervisory authority of all changes in the rights attached to all types of shares and derivative securities of the issuer.
4. The issuer of non-equity securities shall without delay, in the manner stipulated in Article 33 of this Law, publish and post in the Central Storage Facility, also inform the supervisory authority of all changes in the rights attached to securities issued by the issuer, resulting from the change in the non-equity securities issue terms or the interest rate.
5. After the changes in the incorporation documents of the issuer are registered, a copy of such changes shall be immediately submitted to the supervisory authority in writing.
Article 30. Submission of Information to Holders of Securities Issued by the Issuer
1. The issuer must ensure equal treatment of all holders of equivalent securities issued thereby in respect of all the rights attached to the securities.
2. The issuer shall ensure that all the facilities and information necessary to enable the holders of the securities to exercise their rights are available. The holders of securities shall not be prevented from exercising their rights through other persons authorized in accordance with the legal acts of the home Member State of the issuer.
3. The issuer shall:
1) provide the information on the place, time and agenda of meetings of the holders of securities, the total number of securities and voting rights and the rights of the holders of securities to participate in the meetings, as well as other information provided for in the legal acts;
2) make available a proxy form, on paper or, where applicable, by electronic means, to each person entitled to vote at a meeting of holders of securities, together with the notice concerning the meeting or, on request, after an announcement of the meeting;
3) designate as its agent a financial institution through which holders of securities issued by the issuer may exercise their financial rights;
4. If only holders of non-equity securities the denomination per unit of which amounts to at least EUR 100 000 are invited to the meeting, the issuer may choose as venue of the meeting any Member State provided that all the facilities and information necessary to enable such holders of non-equity securities to exercise their rights are made available in that Member State. This choice shall also apply with regard to holders of non-equity securities the denomination per unit of which amounts to at least EUR 50 000 which have already been admitted to trading on a regulated market in the Union before 31 December 2010.
5. The information referred to in this Article may be communicated to holders of securities in electronic means provided that:
1) the decision concerning the possibility to communicate the information electronically is taken at a meeting of holders of securities;
2) the use of electronic means does not depend upon the location of the registered office or place of residence of the securities holder or of a proxy representing that holder, or of the natural persons or legal entities referred to in Paragraphs 2-10 of Article 26(1) of this Law;
3) identification arrangements have been implemented so that holders of securities, their proxies or natural persons or legal entities authorized to exercise the voting rights or manage through the use of the voting rights are effectively informed;
4) holders of securities or natural persons or legal entities authorized to acquire, transfer the voting rights or exercise the same referred to in Paragraphs 2-6 of Article 26(1) of this Law have confirmed in writing their consent to be submitted the information by electronic means. These persons shall have a right at any time to request that the information is communicated to them in writing;
Article 31. Language of the Regulated Information
1. Where securities are admitted to trading on a regulated market only in the Republic of Lithuania which is the home Member State of the issuer, the regulated information shall be published in the Lithuanian and English languages. Publishing the regulated information only in the English language may be chosen by:
1) issuers established in a non-Member State whose securities are admitted to trading on a regulated market only in the Republic of Lithuania and whose home Member State is the Republic of Lithuania;
2. Where the securities are publicly offered in the Republic of Lithuania only, the regulated information shall be published in the Lithuanian language.
3. Where securities are publicly offered or admitted to trading on a regulated market in the Republic of Lithuania, which is the home Member State of the issuer, and in one or several other Member States, the regulated information must be published in the Lithuanian and English languages and in a language at the choice of the issuer acceptable to the supervisory authorities of the host Member States or in the English language. Where securities are publicly offered or admitted to trading on a regulated market in the Republic of Lithuania, which is not the home Member State of the issuer, and in one or several other Member States, the regulated information must be published in the Lithuanian or English languages and in a language at the choice of the issuer acceptable to the supervisory authorities of the other host Member States or in the English language as well as in a language acceptable to the supervisory authority of the home Member State, where securities are publicly offered or admitted to trading on a regulated market in the home Member State of the issuer.
4. Where securities are publicly offered or admitted to trading on a regulated market in one or several Member States, except in the Republic of Lithuania, which is the home Member State of the issuer, the regulated information must be published in a language at the choice of the issuer acceptable to the supervisory authorities of the host Member States or in the English language.
5. Where securities are admitted to trading on a regulated market without the issuer's consent, the obligations under Article 31(1-4) of this Law shall be incumbent upon the person who, without the issuer's consent, has requested such admission and the securities have been admitted to trading on a regulated market.
6. Shareholders of the issuer and the persons referred to in Articles 25 and 26 of this Law shall have a right to publish the regulated information only in the English language.
7. Where securities the denomination per unit of which amounts to at least EUR 100 000 are admitted to trading in a regulated market in one or several Member States, at the choice of the issuer or the person who has requested, without the issuer's consent, the admission of the securities to trading on a regulated market, the regulated information shall be published in the language acceptable to the supervisory authorities of the home Member State and to the supervisory authorities of the host Member States, or the English language. This provision shall also apply with regard to non-equity securities the denomination per unit of which amounts to at least EUR 50 000 and which have already been admitted to trading on a regulated market in one or several Member States before 31 December 2010, until buy-back of such securities.
Article 32. Report on Payments to Public Authorities
The issuers operating within the extractive industry or the primary forest timber/lumber industry, as it is defined in the Law on Financial Statements of Entities of the Republic of Lithuania and the Law on Consolidated Accounts of Groups of Undertakings of the Republic of Lithuania, shall in the manner prescribed by these laws annually prepare a report on payments to public authorities or a consolidated report on payments to public authorities and make such report public and post it in the Central Storage Facility. The report shall be made public not later than within 6 months as of the end of the financial year. Payments made to public authorities shall be specified in the report at a consolidated level.
Article 33. Publishing and Storage of the Regulated Information
1. The issuer or the person who has requested the admission of securities to trading on a regulated market without the issuer’s consent shall, within the terms established by this Law and in the procedure prescribed by the supervisory authority, publish the regulated information.
2. The issuer whose securities are admitted to trading on a regulated market in one or several Member States, or the person who has requested such admission without the issuer’s consent, must publish the regulated information by selecting such means of dissemination of information, which would ensure the availability of information to the investors in the Republic of Lithuania and all the other Member States concerned. Other issuers whose securities have not been admitted to trading on a regulated market in one or several Member States shall publish the regulated information only in the Republic of Lithuania.
3. For the purpose of fulfilling the requirements of the disclosure of information the issuer or the person who has requested the admission of securities to trading on a regulated market without the issuer’s consent shall disclose the regulated information themselves or through an information vendor or the operator of the regulated market.
4. Where the securities are admitted to trading on a regulated market of the Republic of Lithuania only, the issuer or the person who has requested the admission of securities to trading on a regulated market without the issuer’s consent, having disclosed the regulated information shall without delay post the same in the Central Storage Facility where the information must be stored for a period of at least 2 years. The regulated information provided for in Article 21(1), Article 24(1), and Article 32 of this Law must be stored in the Central Storage Facility for a period of at least 10 years.
5. The operator of the regulated market shall ensure that the Central Storage Facility complies with the quality standards of security, certainty as to the information source, time recording and easy access by end users, non-discriminating, free of charge and easy access to the information stored therein and the access to the information stored via the European Electronic Access Point developed by the European Securities and Markets Authority. For that purpose the operator of the regulated market shall establish and approve with the supervisory authority a detailed procedure of the submission, storage and use of information and ensures full compliance with such procedure. The supervision of the publishing and storage of information shall be performed by the supervisory authority. The procedure shall be declared approved by the decision of the supervisory authority.
Article 34. The Scope of Coverage of a Takeover Bid
1. The requirements established in this Section shall apply to takeover bids in respect of equity securities issued by an issuer established in the Republic of Lithuania. In respect of the takeover bid regarding the securities issued by an issuer of equity securities established outside the Republic of Lithuania the requirements of this Section shall apply having regard to the provisions of Article 45 of this Law, provided the supervisory functions under Article 44 of this Law are performed by the supervisory authority.
2. The requirements established in this Section shall not apply to takeover bids in respect of the following securities:
Article 35. The General Principles of the Takeover Bid
When applying the requirements of this Section the following principles shall be complied with:
1) all holders of securities of the same type of an offeree company must be subject to uniform conditions of the takeover bid; where a person acquires control of the company, other holders of securities of that company must be protected;
2) the takeover bid must be announced without violating the transparency and integrity of the securities market of the offeror of the offeree company or other companies related to the takeover bid;
3) the holders of the securities of an offeree company must have sufficient time and information to enable them to reach a competent decision regarding the takeover bid; where they advise the holders of securities, the management bodies of the offeree company must give their views on the effect of the implementation of the takeover bid on employment, conditions of employment and the locations of the company’s places of business;
4) the management bodies of the offeree company must act in the interests of the company as a whole and must not deny the holders of securities the opportunity to decide on the merits of the takeover bid;
5) artificial markets must not be created in the securities of the offeree company, the offeror company or other companies related to the takeover bid in such a way that rise or fall of the prices of the securities become artificial and the normal functioning of the markets is distorted;
6) an offeror must announce the takeover bid only after ensuring that it can effect in full any cash considerations, and after taking all reasonable measures to secure the implementation of any other type of consideration;
Article 36. Obligation to Announce a Takeover Bid and the Procedure for the Information about the Takeover Bid
1. Where a person, acting independently or in concert with other persons, acquires shares that in connection with the holding held by him or by other persons acting in concert entitles him to more than 1/3 of votes at the general meeting of shareholders of the company in respect of whose shares a takeover bid is to be submitted, he must either:
2. The duty established in Article 36(1) of this Law shall also apply to a person who has acquired control over a person holding shares of the company in respect of whose shares a takeover bid is to be submitted that entitle him to more than 1/3 of votes at the general meeting of shareholders.
3. Where a person, acting independently or in concert with other persons, acquires shares that in connection with the holding held by him or by other persons acting in concert entitles him to more than 1/3 of votes at the general meeting of shareholders of the company in respect of whose shares a takeover bid is to be submitted, shall without delay and in any case not later than within 4 trading days announce in the source specified in the articles of association of the offeree company about the exceeding of the established 1/3 threshold and of its intention to submit the takeover bid or transfer the securities exceeding the threshold, also accordingly notify the supervisory authority, the operator of the regulated market and the company in respect of whose shares a takeover bid is to be submitted. In the analogous way the information on the transfer of the securities exceeding the established threshold shall be disclosed in the cases where in accordance with Paragraph 1 of Article 36(1) of this Law the mandatory takeover bid is not submitted.
4. The duty established in Article 36(2) of this Law shall arise from the day when the person learns of the acquisition of the respective number of votes, or, having regard to the specific circumstances, should learn about it.
5. The offeror shall within 20 days from the public announcement about its intention to submit a mandatory takeover bid referred to in Article 36(2) of this Law furnish to the supervisory authority the circular. Circulars shall be approved by the supervisory authority.
6. Upon exceeding the threshold referred to in Article 36(1) of this Law a person acting independently or in concert with other persons shall be devoid of all the votes at the general meeting of shareholders of the company in respect of whose shares the takeover bid is submitted. Voting right shall be regained on the day when:
2) the shares exceeding the threshold of the 1/3 of the votes are transferred and the information about the fact of the transfer of the securities exceeding the specified threshold is disclosed in the manner and to the entities defined in Article 36(3) of this Law, or for some other reasons the holding is reduced to the threshold below 1/3 of the votes.
7. A person who has decided to submit a voluntary takeover bid must without delay, but not later than within 4 trading days as of decision-taking, announce in the source specified in the articles of association of the offeree company, notify the supervisory authority, the operator of the regulated market and the offeree company thereof, and within 20 days of the announcement submit to the supervisory authority a circular.
Article 37. Cases when a Mandatory Takeover Bid is not Submitted
1. The person who under this Law would be under obligation to submit a mandatory takeover bid shall be exempted from this obligation where:
2) the threshold is exceeded because all of the issuer’s securities or part thereof are exchanged for the securities of the newly incorporated company (companies) in proportion to the authorized capital of the issuer under the reorganization or the split-off issuer and the person had previously executed the takeover bid or had been exempted from the obligation to submit a takeover bid although he had exceeded the threshold in respect of which the obligation to announce a takeover bid arises;
3) the threshold is exceeded where the company that was reorganized by way of division or from which a new spin-off company is established had previously implemented the takeover bid or was exempted from the obligation to implement the takeover bid, although it exceeded the threshold of the votes giving rise to the obligation to submit a takeover bid, and the securities held thereby are transferred to the companies incorporated following the division of the company;
4) the threshold is exceeded in accordance with the Law on Restructuring of Enterprises of the Republic of Lithuania under the restructuring plan of the issuer;
5) the threshold is exceeded through the acquisition of the securities from the controlled or controlling person; this exemption is applied only as long as the relation specified in this Paragraph between the seller and the purchaser is maintained;
6) the threshold is exceeded by acquiring the securities when the mandatory bid is executed in connection with other persons and the threshold is exceeded personally;
7) acting independently or in concert with other persons and having submitted a voluntary bid to acquire all securities of the offeree company for the price established in accordance with the requirements of Article 39 of this Law acquires more than 1/3 of the votes in the general meeting of shareholders of such company;
2. The obligation to submit a mandatory bid shall not apply to the Depository that exceeds the vote threshold by acquiring the shares in respect of which it had issued the international depository receipts.
3. The company that has acquired the own shares from an intermediary of public trading in securities who purchased the securities while implementing price stabilization measures based on the provisions of Commission Regulation (EC) No. 2273/2003 shall be exempted from the requirement to submit a takeover bid.
Article 38. Implementation of a Takeover Bid
1. The execution of the takeover bid shall commence on the fourth working day from the decision of the supervisory authority to approve the circular. The term of the execution of the takeover bid may not be shorter than 14 days and not exceed 70 days.
3. All holders of securities of the offeree company, employees of the offeree company and the offeror or their representatives shall be ensured equal possibilities to readily and promptly access information about the takeover bid.
4. Where the supervisory authority has reasons to suspect that the requirements of this Law and the resolutions of the supervisory authority passed on the basis thereof have been violated, or the information that may be relevant to a person’s decision to purchase or sell securities becomes known, the supervisory authority shall suspend the implementation of the takeover bid and set a time limit of up to 10 days for the infringements to be eliminated and other actions performed. Where the infringements are not eliminated within the time limit set or other instructions of the supervisory authority are not being complied with the supervisory authority shall take a decision to cancel the approval of the circular.
5. Where a mandatory takeover bid is submitted, the settlement for the securities of the offeree company shall be made only in cash. Where a voluntary takeover bid is submitted, the settlement for the securities of the offeree company shall be made in cash or securities traded on a regulated market of the Member State or in cash and the said securities. Where settlement is made in securities, cash shall in all cases be offered as the alternative means of settlement.
6. The supervisory authority shall establish the procedure of the submission, implementation, suspension of implementation of the takeover bids, also the procedure for the approval and publication of the circular and the settlement for the purchased securities.
7. In the case of a mandatory takeover bid, persons acting in concert shall assume joint and several liability for the fulfillment of the obligation to submit and implement the mandatory takeover bid. The number of securities acquired by every person acting in concert (when a mandatory takeover bid must be submitted by persons acting in concert) shall be proportionate to the number of votes held by these persons at the general meeting of shareholders of the offeree company at the moment of the subscription of the circular, unless the agreement concluded by persons acting in concert provides differently.
Article 39. Establishment of the Price of a Mandatory Takeover Bid
1. The price of a mandatory takeover bid shall be fair. The price shall be established in accordance with the following principles:
1) the price of a mandatory takeover bid shall be not lower than the highest price of the securities acquired by the offeror in the course of 12 months preceding the exceeding of the threshold defined in Article 36(1) of this Law, and shall be not lower than the average weighted price on a regulated market and the multilateral trading facility in 6 months prior to the date of exceeding the established threshold when the securities concerned are traded on a regulated market and the multilateral trading facility. When the securities of the offeree company are traded not only on a regulated market in the Republic of Lithuania but also in other regulated (or equivalent third country’s) markets the average weighted price shall be established in the regulated market where a turnover of securities acquired by the offeror in 6 months prior to the date of exceeding the threshold established in Article 36(1) of this Law was highest. The supervisory authority shall lay down the detailed procedure for the calculation of a weighted average market price;
2) where the highest price of the securities acquired by the offeror in 12 months prior to the date of exceeding the threshold established in Article 36(1) of this Law may not be established and the securities concerned have not been traded neither on a regulated market nor on the multilateral trading facility, the price of the securities purchased by way of a mandatory bid shall be established having regard to the value established by the asset valuator by not less than two viewpoints. The asset valuator selected by the offeror shall be approved by the supervisory authority. The supervisory authority shall have a right not to approve an asset valuator where he is related to the offeror or other persons having pecuniary interests in the securities of an offeree company. The supervisory authority shall lay down the procedure approving an asset valuator.
2. The supervisory authority shall have a right to require such price be adjusted in the following cases:
1) where the price of a mandatory takeover bid has been established by an agreement between the buyer and the seller;
2) where the market abuse affects the price of the securities that are the subject of the mandatory takeover bid;
4) where a mandatory takeover bid is submitted after a significant period of time following the day of exceeding the threshold of votes specified in Article 36(1) of this Law;
3. The supervisory authority shall have a right to allow adjusting the price of the mandatory takeover bid in order to enable a company incurring financial losses to be rescued.
4. A decision of the supervisory authority to adjust the price of a takeover bid or to require such price to be adjusted must be substantiated and made public. When adjusting the price or requiring such price to be adjusted the supervisory authority may take into consideration the following criteria:
1) the weighted average price of the securities on the regulated market and the multilateral trading facility in the period of 6 months prior to the exceeding of the threshold of votes established in Article 36(1) of this Law;
5. Where a person in the period from the date of the exceeding the threshold of the votes specified in Article 36(1) of this Law until the end of the validity of the takeover bid acquires the securities that have been the subject of the takeover bid at a price higher than the mandatory takeover bid price, the price of the mandatory takeover bid must be accordingly increased.
6. Where an offeror in the period of one year after the end of the validity of the mandatory takeover bid acquires the securities in respect of which it had submitted a mandatory takeover bid at the price higher than the mandatory takeover bid price, the offeror must pay the difference in the price to persons who have responded to the mandatory takeover bid.
7. A shareholder of the offeree company shall have a right to appeal to court concerning the safeguarding of the compliance of the price established in the manner specified in this Article to the requirements of justice. In this case Articles 2.118, 2.119 and 2.127-2.130 of the Civil Code shall apply mutatis mutandis.
8. The requirements of this Article concerning the establishment of the price of the mandatory bid shall mutatis mutandis apply to the securities of the offeree company incorporated in the Republic of Lithuania that are not traded on a regulated market operating in the Republic of Lithuania and the multilateral trading facility.
Article 40. Duties of the Offeree Company within the Validity of the Takeover Bid
1. Upon the announcement of the intention to submit a takeover bid the management bodies of the offeree company and of the offeror must immediately (on the same day) notify the representatives of their employees, and in the absence of such representatives—the employees of their intention to submit the takeover bid, and upon the submission of the takeover bid—of the submission of the takeover bid. The management bodies of the offeree company and of the offeror must also submit to the representatives of the employees, and in the absence of such representatives—the employees themselves the circular on the same day it is made public.
2. The offeror must submit the circular to the offeree company. Within 10 days from the date of the publication of the circular approved by the supervisory authority the management bodies of the offeree company must, through the mass media indicated in the circular and the website of the offeree company, communicate its reasoned opinion concerning the takeover bid, including the possible effects of the implementation of the takeover bid on all company’s interests, conditions of employment, number of employees as well as concerning the offeror’s strategic plans in respect of the offeree company and their effect on the number of employees and their job positions.
3. The management bodies of the offeree company must communicate their opinion on the takeover bid to the representatives of its employees, and in the absence of such representatives—to the employees themselves. In the event the management bodies of the offeree company receive in advance the employees’ opinion on the effect of the takeover bid upon the number of the employees, such an opinion shall be, in connection to the opinion of the management bodies of the offeree company, published on the internet website of the offeree company.
4. The management and/or the supervisory bodies of the offeree company shall be prohibited from performing any actions that could significantly worsen the financial status of the company or in any other way inhibit the implementation of the takeover bid.
5. The prohibition provided for in Article 40(4) of this Law to inhibit the implementation of the takeover bid shall not apply where such actions are approved by the general meeting of shareholders of the offeree company that is registered in the Republic of Lithuania. The management or the supervisory body of the offeree company must obtain the prior authorization of the general meeting of shareholders given for this purpose before taking any action, other than seeking alternative takeover bids, which may result in the frustration of the takeover bid and in particular before issuing any shares which may result in a lasting impediment to the offeror to acquire over 1/3 of votes in the general meeting of shareholders of the offeree company.
6. The prior authorization by the general meeting of shareholders referred to in Article 40(5) of this Law shall be obtained in respect of the actions of the management or supervisory bodies performed in the period from the public announcement indicated in Article 36(3) of this Law of the exceeding of the 1/3 votes threshold or the public announcement referred to in 36(7) of this Law on the intention to submit a voluntary takeover bid until the end of the validity of the takeover bid.
7. In the event the decisions of the management or supervisory bodies of the offeree company passed prior to the period established Article 40(6) of this Law are not yet partly or fully implemented, the general meeting of shareholders must approve or confirm any decision which does not form part of the normal course of the company’s business and the implementation whereof may result in the frustration of the takeover bid.
8. In the case referred to in Article 40(5) of this Law the notice on the convening of the general meeting of shareholders shall be published in the source indicated in the articles of association not later than 15 days prior to the date of the general meeting of shareholders.
Article 41. Restrictions Related to the Implementation of a Takeover Bid
1. Any restrictions on the transfer of securities provided for in the articles of association of the offeree company, the contractual agreements between the offeree company and holders of its securities, or the agreements between the holders of securities of the company shall not apply in respect of the offeror during the time of the implementation of the takeover bid.
2. Restrictions on voting rights provided for in the articles of association of the offeree company, the contractual agreements between the offeree company and the holders of its securities, and between the holders of securities of the company shall not apply at the general meeting of shareholders which decides on any issue referred to in Article 40(5) of this Law.
3. Multiple-vote securities shall carry only one vote each at the general meeting of shareholders which decides on any issue referred to in Article 40(5) of this Law.
4. Where, following the takeover bid the offeror acquires 75 percent or more of the voting rights, neither restrictions on the transfer of securities or on voting rights indicated in Article 41(1-2) of this Law, nor the extraordinary rights of the shareholders concerning the appointment or removal of board members provided for in the articles of association of the offeree company shall apply.
5. The multiple-vote securities shall carry only one vote in the first meeting of the shareholders following the closure of the takeover bid convened by the offeror seeking to amend the articles of association or appoint or dismiss board members.
6. In the case referred to in Article 41(5) of this Law the offeror shall have a right to convene the general meeting of shareholders and shall make a public announcement to that effect in the source indicated in the articles of association of the company not later than 15 days prior to the general meeting of shareholders.
7. An equitable compensation is provided for any loss of the holders of the rights resulting from the implementation of the requirements under Article 41(1-5) of this Law. The takeover bid offeror must define the compensation procedure in the circular. Article 41(2-5) of this Law shall not be applied to securities whose restriction of voting rights is compensated by special property privileges. Disputes regarding compensations shall be settled by court procedures.
Article 42. Mandatory Sale and Purchase of Shares
1. A shareholder of an issuer of equity securities, when acting independently or in concert with other persons and having acquired not less than 95 percent of the capital carrying voting rights and not less than 95 percent of the total votes at the general meeting of shareholders of the issuer shall have a right to require that all the remaining shareholders of the issuer sell the voting shares owned by them, and the shareholders shall be obligated to sell the shares in the manner established by this Law.
2. Votes of the shareholder acting independently or in concert with other persons shall be calculated in accordance with Article 26 of this Law. Where the issuer has issued shares of different classes, the votes shall be counted and the rules for the sale and purchase of shares shall be applied individually in respect of each class of shares. Where, in the manner stipulated by this Article, the shareholder purchases shares acting in concert with other persons:
1) persons acting in concert shall assume joint and several liability for the fulfillment of the obligation to acquire the shares;
2) the number of shares acquired by persons acting in concert shall be proportionate to the number of votes of the issuer held thereby at the moment of the submission of the notification referred to in Article 42(6) of this Law, unless the agreement concluded by persons acting in concert provides differently.
3. A mandatory selling or buy-up of shares may be initiated within 3 months from the implementation of the mandatory takeover bid or voluntary takeover bid to acquire the remaining voting shares.
4. The price offered for the shares shall be equitable and it shall be established in accordance with the following principles:
1) where the shareholder acting independently or in concert with other persons and having submitted a mandatory takeover bid acquired not less than 95 percent of votes in the general meeting of shareholders of the issuer, the fair price shall be the one paid to him for the shares of the issuer while acquiring the shares in this manner;
2) where a shareholder, acting independently or in concert with other persons and having submitted a voluntary bid acquired shares entitling it to not less than 95 percent of votes at the general meeting of shareholders of the issuer, the fair price shall be the one paid to the shareholder for the shares of the issuer while acquiring the shares in this manner, provided that where the offeror was acquiring the shares in this manner, the shareholders of not less than 90 percent of the shares, in respect of which the takeover bid was submitted, sold the shares to the offeror;
5. Where the price at which the securities are offered to be bought-up is established in accordance with Paragraphs 2 and 3 of Article 42(4) of this Law, the price shall be duly substantiated and approved in advance by the supervisory authority. The supervisory authority shall have the right to require on a motivated basis a change of the price. The notification provided for in Article 42(6) of this Law shall be submitted to the issuer not later than within 30 days from the date of the final establishment of the price.
6. A shareholder acting independently or in concert with other persons and seeking to buy-up all the shares of the issuer must submit to the issuer a notification on the intended purchase of the shares specifying the following:
1) data on the shareholder buying-up the shares and acting independently or in concert with other persons (full name and place of residence of the natural person; name and registered office (address) of the legal entity);
2) number of shares of the shareholder buying-up the shares and acting independently or in concert, by classes and votes granted thereby;
3) the requirement of the shareholder buying-up the shares and acting independently or in concert with other persons that other shareholders sell all shares of the issuer of the appropriate class;
7. Attached to the notification to the issuer specified in Article 42(6) of this Law shall be the documents used as a basis to establish the price of shares:
1) in the cases specified in Paragraphs 1 and 2 of Article 42(4) of this Law—the circular and the report on the execution of the takeover bid;
8. Upon receipt of the notification of the shareholder buying-up the shares and acting independently or in concert with other persons, the issuer shall not later than within 5 days notify, by registered mail, each shareholder, the supervisory authority and the operator of the regulated market of the purchase of the shares and publish an appropriate notice in the source specified in the issuer's articles of association. The notice on the buy-up of the shares shall indicate:
3) information specifying the source in which the issuer has announced a mandatory buy-up of shares (this information shall be indicated only in the notifications sent by registered mail);
4) time limit indicated in Article 42(9) of this Law during which the shares must be sold or the proposed share sale price must be contested;
9. Within 90 days from the date of the announcement of the notice indicated in Article 42(8) of this Law in the source specified in the issuer’s articles of association all shareholders shall be obligated to sell their shares to the shareholder indicated in the notice on the buy-up of the shares, acting independently on in concert with other persons, or contest the price proposed for the shares in the manner stipulated in Article 42(13) of this Law.
10. Where within the term indicated in this Article the shareholder fails to sell the shares, the shareholder buying-up the shares shall be deemed to have acquired, on the last day of the time limit indicated in Article 42(9) of this Law, the right to appeal to court within 30 days by submitting the documents proving the payment transfer to the deposit account of the shareholder who has refused to sell the shares in the manner stipulated in Article 6.56 of the Civil Code or the performance of the payment in another manner, and requiring the account managers to perform the necessary entries in the securities account on the transfer of the title to the shares to the shareholder buying-up the shares. The ruling of the Court to make the appropriate entries in the securities account shall be deemed to constitute the legitimate basis under which for the account managers are obligated to make the appropriate entries. The civil cases referred to herein shall be examined in the procedure established in respect of the cases concerning the establishment of facts having a legal relevance.
11. Where the shareholder buying up the shares fails to pay the proposed price for the shares by the last day of the time limit referred to in Article 42(9) of this Law, it shall be deemed that the shareholder’s right to obligatorily purchase the shares has expired and the shareholder loses his right to require in future that the shares be sold to him in the manner provided for in this Article.
13. Within the time limit established in Article 42(9) of this Law each shareholder shall have a right to appeal to the regional court of the registered office of the offeree company requiring to establish the fair price of the shares. In this case Articles 2.118, 2.119 and 2.127-2.130 of the Civil Code shall apply mutatis mutandis. Where at least one shareholder has applied to the court, the court may suspend the procedure of the mandatory buy-up of shares until the date its ruling concerning the establishment of the price of the shares comes into effect. Within the period when the procedure of the purchase of shares is suspended the shareholders shall be exempted from the obligation to purchase or sell the shares, and the time limits in respect of the fulfillment of obligations of the shareholders shall be suspended. The price applicable to all shares, including those sold to the shareholder who has made a notice on the buy-up of the shares prior to the appeal to the court, shall be not less than established by the ruling of the court.
14. A shareholder of an issuer of equity securities shall have a right to require that a shareholder, who, when acting independently or in concert with other persons, has acquired the shares comprising not less than 95 percent of the capital carrying the voting rights and not less than 95 percent of the total votes at the general meeting of shareholders of the issuer, would buy the shares belonging to him and granting the voting rights, while the said shareholder shall be obligated to purchase the shares in the manner established by this Law.
15. In the cases where some shareholder requires that a shareholder who, when acting independently or in concert with other persons, has acquired the shares comprising not less than 95 percent of the capital carrying the voting rights and not less than 95 percent of the total votes at the general meeting of shareholders of the issuer, would buy the shares belonging to him, the provisions of Article 42(2-10, 12, and 13) of this Law shall apply mutatis mutandis.
Article 43. Delisting of Securities from the Trading on a Regulated Market Operating in the Republic of Lithuania
1. The decision to delist shares of the issuer from the trading on a regulated market operating in the Republic of Lithuania shall be passed by the general meeting of shareholders by the majority of 3/4 of all votes attaching to shares of the shareholders attending the meeting. Following the decision to delist the shares from the trading of the regulated market operating in the Republic of Lithuania, a takeover bid shall be submitted and implemented to buy-up the shares admitted to the regulated market operating in the Republic of Lithuania.
2. In the cases where the decision to delist the shares from the trading on a regulated market operating in the Republic of Lithuania is passed otherwise than on the initiative of the issuer, the obligation to submit a takeover bid shall not apply. The operator of a regulated market shall be entitled to delist the shares from the trading on a regulated market operating in the Republic of Lithuania where the further presence of the concerned issuer’s shares in the trading of the regulated market operating in the Republic of Lithuania constitutes a threat to the interests of the investors and proper functioning of the securities market.
3. The takeover bid aimed to delist shares from the trading on a regulated market operating in the Republic of Lithuania must be submitted by the shareholders who have voted in favor of the decision to delist the shares from the trading on a regulated market operating in the Republic of Lithuania. One or several shareholders shall have a right to discharge this duty on behalf of other shareholders. In the course of this takeover bid the shares may be sold by those shareholders who voted against the decision to delist the shares from the trading on a regulated market operating in the Republic of Lithuania or who have abstained from voting in this respect.
4. The price of the takeover bid aimed to delist shares from the trading on a regulated market operating in the Republic of Lithuania shall be not lower than the weighted average market price of the shares on a regulated market or the multilateral trading facility in the course of 6 months preceding the public announcement on the intention to delist the shares from the trading of a regulated market operating in the Republic of Lithuania. Where a shareholder of the issuer, acting independently or in concert with other persons submitted and implemented a mandatory takeover bid not earlier than 3 months prior to the decision of the general meeting of shareholders to delist the issuer’s shares from the trading on a regulated market operating in the Republic of Lithuania, the price shall be fixed equal to the price paid for the shares acquired this way.
5. The management body of the issuer must, not later than 21 days prior to the general meeting of shareholders intending to discuss the issue of delisting the shares from the trading on a regulated market operating in the Republic of Lithuania, draw up and publicly announce the notice on the intention to delist the shares from the trading on a regulated market operating in the Republic of Lithuania. The said notice shall specify:
2) the reasons for delisting the shares from the trading on a regulated market operating in the Republic of Lithuania;
3) the measures undertaken by the management bodies of the issuer to protect the rights and interests of the shareholders;
Article 44. Competence of the Supervisory Authority
1. The supervisory authority shall supervise the compliance with the provisions of this Section where:
1) the takeover bid is submitted in respect of the securities of a company whose registered office is in the Republic of Lithuania that have been admitted to trading on a regulated market operating in the Republic of Lithuania;
2) the takeover bid is submitted in respect of the securities of a company whose registered office is in the Republic of Lithuania that have not been admitted to trading on a regulated market operating in the Republic of Lithuania or of a Member State;
3) the takeover bid is submitted in respect of the securities of a company whose registered office is in a Member State that have been admitted to trading on a regulated market operating in the Republic of Lithuania;
4) the takeover bid is submitted in respect of the securities of a company admitted to trading on regulated markets of more than one Member State, but the first authorization to admit the securities concerned to trading on a regulated market was issued in the Republic of Lithuania;
5) the takeover bid is submitted in respect of the securities of a company simultaneously admitted to trading on regulated markets of more than one Member State and the company has, on the first day of trading, decides to delegate the supervision of the procedure of the takeover bid to the supervisory authority.
2. The company must announce of its decisions passed in the cases referred to in Paragraph 5 of Article 44(1) of this Law in the source indicated in the articles of association and on the first trading day notify the supervisory authority, the operator of the regulated market, also the supervisory authorities and the operators of the regulated markets of other Member States of the same.
3. The supervisory authority shall cooperate with the supervisory authorities of other Member States and shall have a right to communicate to them all required information, in particular the information necessary for the implementation of the provisions of Paragraphs 3, 4, and 5 of Article 44(1) of this Law.
Article 45. Applicable Law
1. In the cases referred to in Paragraphs 3, 4, and 5 of Article 44(1) of this Law concerning the price of the takeover bid, method of settlement, procedure of announcement, decisions of the offeror to submit a takeover bid, contents of the circular and the submission of the takeover bid shall be dealt with in accordance with the law of the Republic of Lithuania.
2. In matters relating to the information to be provided to the employees of the offeree company, to the company law, in particular the percentage of voting rights the acquisition whereof triggers the obligation to submit a takeover bid, the exemption from the obligation to submit a takeover bid, also terms under which the management bodies of the offeree company may undertake any action to frustrate the takeover bid, the applicable laws shall be of the Member State in which the offeree company has a registered office and the dealing with the above issues shall be supervised by the supervisory authority of that Member State.
Article 46. Supervisory authority
1. The drawing up, approval and publication of the prospectus, the publication and storage of the periodic and current information, execution of takeover bids shall be regulated and supervised by the supervisory authority.
2. The supervisory authority shall perform the functions indicated in Article 46(1) of this Law according to this Law, the Law on the Bank of Lithuania of the Republic of Lithuania, and the Law on Markets in Financial Instruments. The supervisory authority shall have rights and duties established in this Law, the Law on the Bank of Lithuania of the Republic of Lithuania, and the Law on Markets in Financial Instruments.
Article 47. Functions, Rights and Duties of the Supervisory Authority
1. The supervisory authority shall:
4) check whether when implementing requirements of this Law issuers’ accounting is managed and financial statements and/or consolidated financial statements are drawn according to the applicable requirements for the preparation of accounting and financial statements;
5) supervise whether the compliance of persons with the requirements established in this Law and in resolutions adopted by the supervisory authority on the basis of this Law, as well as with instructions or obligations given by the supervisory authority is appropriate;
7) cooperate with the supervisory authorities of Member States and third countries and exchange with them information necessary for the performance of supervisory functions; in analyzing cross-border cases, coordinate its actions with the supervisory authorities of Member States and third countries;
2. When performing the functions assigned to it the supervisory authority shall have the right to:
1) require the persons to disclose the information required by this Law and submit other related documents. Where the persons concerned seek to avoid publishing such information the supervisory authority shall have a right to publish such information itself;
2) require the persons to submit any information at their disposal of relevance and, where necessary, call up such persons and require them to present explanations;
3) require the auditors of the issuers to submit information necessary for the performance of the functions by the supervisory authority;
4) obligate to correct the submitted inaccurate and misleading information and issue other binding instructions within the scope of powers of the supervisory authority;
5) on the basis of a motivated decision, obligate the takeover bid offeror to choose another asset valuator to determine the takeover bid or mandatory purchase and sale price, if there is reasonable suspicion that the takeover bid or mandatory purchase and sale price fixed by the valuator is not right;
6) suspend for up to 10 working days the public offering of securities or admission to trading on a regulated market, if there is reasonable suspicion that this is done disregarding requirements or terms and conditions provided for in the prospectus;
7) require suspending or terminating the trading in specific securities on a regulated market and the multilateral trading facility;
9) obtain, free of charge, documents, copies thereof, other data and information from persons being inspected as well as obtain, free of charge, documents and data or copies thereof related to a person being inspected from other undertakings, public authorities, registers and other institutions performing similar functions;
10) transfer the material and such other information collected during the investigation process to law-enforcement bodies;
11) employ specialists and experts of appropriate areas (auditors, accountants, lawyers, specialists of information technologies, etc.) requesting them to provide their opinions, conclusions, assessment or perform other actions requiring specific qualification, knowledge or expertise;
12) conclude agreements with supervisory authorities of third countries on cooperation and exchange of information;
3. The supervisory authority must prepare and submit to the European Commission the information on the implemented takeover bids in respect of the securities traded on a regulated market operating in the Republic of Lithuania.
4. The performance of the requirement by the supervisory institution as provided in Paragraph 3 of Article 47(2) of this Law shall not be considered to constitute the infringement of the prohibition to disclose the confidential information and therefore shall not have any negative repercussions upon the auditors.
5. The supervisory authority shall notify the European Securities and Market Authority about agreements concluded according to Paragraph 12 of Article 47(2).
6. In the request for the European Commission as provided in Paragraph 13 of Article 47(2) of this Law the supervisory authority shall submit the information justifying its opinion on the compliance of the legal and supervisory framework of the market of the third country concerned with at least the following conditions for recognition of a legal and supervisory framework as equivalent:
2) market is subject to the effective supervision and enforcement of the application of efficient sanctions on an on-going basis;
3) market has clear and transparent rules regarding the admission of securities to trading ensuring free circulation as well as fair, orderly, and efficient trading in such securities;
Article 48. Duty of the Supervisory Authority’s Board Members and Employees to Protect Confidential Information
1. The board members and employees of the supervisory authority shall, in the manner prescribed in Article 73 of the Law on Markets in Financial Instruments, secure the confidential information they have become aware of in the course of executing their functions established herein. The contents of confidential information shall be defined by the supervisory authority.
2. The right of the supervisory authority to communicate the confidential information in accordance with the procedure laid down in Articles 76, 77 and 78 of the Law on Markets in Financial Instruments shall also be extended upon the information obtained in the course of the performance of the functions prescribed by this Law.
3. Provisions of Article 48(1) of this Law do not hinder the supervisory authority to transfer confidential information to the European Securities and Market Authority or the European Systemic Risk Board, with regard to restrictions associated with the information of a particular enterprise and impact on the third parties as set respectively in Regulation (EU) No. 1095/2010 and Regulation (EU) No. 1092/2010.
Article 49. Precautionary Measures Available to the Supervisory Authority in Respect of an Issuer whose Home Member State is not the Republic of Lithuania but whose Securities Have Been Admitted to Trading on a Regulated Market in the Republic of Lithuania
1. Having reasonable grounds to suspect that the issuer whose home Member State under Article 20(2) of this Law is not the Republic of Lithuania, but whose securities have been admitted to trading only on a regulated market in the Republic of Lithuania or that the persons referred to in Article 25(1) of this Law have infringed the requirements concerning the disclosure of the regulated information prescribed in this Law the supervisory authority shall accordingly notify the supervisory authority of the home Member State of the issuer and the European Securities and Market Authority.
2. If, despite the measures taken by the supervisory authority of the home Member State of the issuer, or because such measures prove inadequate, persons referred to in Article 49(1) of this Law persist in infringing the requirements for disclosing the regulated information established herein and infringe the interests of the investors of the Republic of Lithuania, the supervisory authority shall, after informing the supervisory authority of the home Member State of the issuer, within a reasonable period of time, but not later than within 5 working days, take all the appropriate measures in order to protect the interests of the investors. The supervisory authority shall immediately, but not later than within 5 working days, notify the European Commission and the European Securities and Markets Authority of the measures that have been undertaken.
Article 50. Right of the Supervisory Authority to Perform Inspections
1. With a view to determining the compliance with this Law and the legal acts passed on the basis thereof and related thereto the supervisory authority shall have a right to organize and perform inspections.
Article 51. Responsibility for Violation of this Law
1. The following sanctions shall be applied in the manner prescribed in Article 94 of the Law on Markets in Financial Instruments for the violation of this Law or legal acts adopted on the grounds of this Law and/or the requirements laid down in the Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (hereinafter referred to as the Regulation (EC) No. 1060/2009) and/or failure to implement binding instructions given by the supervisory authority:
2. Decision on the application of sanctions may be passed by the supervisory authority in the event that not more than 2 years have passed from the date of the violation and in the case of a continuous or long-term (lasting) violation—from the day the last continuous violation actions were committed or the day the long-term (lasting) violation was cleared up.
3. The supervisory authority, where taking a decision to apply one or several sanctions, selecting a particular sanctions or sanctions, and the extent thereof, shall assess the severity and duration of violations identified, person’s, whom the sanction is applied to, fault, financial capacity, previous violations and sanctions applied, cooperation with the supervisory authority, the amount of revenue and such other material benefits received, losses avoided, or damage caused as a result of such violations, if it can be determined, as well as the effects of violations identified and sanction or sanctions to be applied on the stability and reliability of the financial market.
4. The supervisory authority, where assessing the circumstances referred to in Article 51(3) of this Law and when there are no aggravating circumstances referred to in Article 94 of the Law on Markets in Financial Instruments, shall, pursuant to the criteria of justice and rationality, have a right not to apply the sanction or sanctions, if all of the following requirements are met:
5. Where a sanction is applied to a legal entity, the supervisory authority shall also have a right to apply sanctions to the legal entity’s managers or such other persons responsible for the violation.
6. The information on sanctions applied, including the information on the essence of the inflicted violation of a legal act and the identity of the inflicting person, shall be published on the website of the supervisory authority immediately after informing the person about the decision to apply the sanction in writing, but not later than within 3 days. If the decision to apply the sanction is appealed against, the information on complaints submitted with respect to the sanctions applied and the results of their hearing shall also be published on the website of the supervisory authority. If the publication of the information on sanctions applied had the adverse effects on the stability of the financial market of the Republic of Lithuania or a pre-trial investigation or caused disproportionate damage to natural persons or legal entities, the publication of such information should be postponed until the extinction of such circumstances or it should be published without disclosing the information on the person, who has inflicted the violation. The supervisory authority shall ensure that the published information is available for 5 years as of publication thereof. Personal data included in the published information shall only be kept on the website of the supervisory authority for a period, which is necessary pursuant to the requirements of personal data protection.
Article 52. The Amount of Fine
1. The supervisory authority shall have the right to impose the following fines:
1) upon the issuers, who have failed to timely fulfill the requirements applied to them in accordance with Articles 21, 22, 23, 29, and 32 of this Law, persons, who have failed to timely notify of the acquisition or disposal of voting rights in the manner prescribed in Articles 25, 26, 27, and 28 of this Law — up to EUR 10 000 000 or up to 5 percent of the last financial year’s income in case of being a legal entity;
2) upon the issuers, who have failed to timely fulfill the requirements applied to them in accordance with Articles 21, 22, 23, 29, and 32 of this Law, persons, who have failed to timely notify of the acquisition or disposal of voting rights in the manner prescribed in Articles 25, 26, 27, and 28 of this Law — up to EUR 2 000 000 in case of being a natural person;
3) upon persons organizing or implementing public offering of securities or trading on a regulated market if a prospectus was not approved and/or announced before these actions or public offering or trading on a regulated market are prohibited or suspended — up to the amount of the total denomination of securities offered publicly or admitted to trading on a regulated market;
4) upon persons responsible for the correctness and comprehensiveness of information indicated in the prospectus, who provided incomplete or misleading information, thus not complying with the requirements provided for in Article 6 of this Law — up to EUR 28 962;
5) upon persons failing to fulfill the requirement provided for in Article 19 of this Law — up to EUR 57 924;
6) upon persons failing to fulfill the requirement provided for in Article 36 of this Law to provide a mandatory takeover bid to purchase remaining voting shares of the company — up to EUR 144 810; upon persons failing to fulfill other requirements provided for in Article 36 of this Law — up to EUR 28 962;
7) upon persons who required according to the procedure laid down in Article 42 of this Law that all other shareholders of the issuer sell their shares but failed to make settlements with them or who do not fulfill the obligation to buy out shares from any shareholder upon his request — up to EUR 28 962;
8) upon persons failing to fulfill the requirements provided for in Articles 12, 17, 24, 35, 38, 40, 41 of this Law — up to EUR 28 962;
9) upon persons failing to fulfill the requirement provided for in Article 11, 16, 30, 31 of this Law — up to EUR 14 481;
10) upon persons failing to fulfill instructions of the supervisory authority, not providing to the supervisory authority the information specified in this and other laws or hindering the supervisory authority or its authorized persons to perform investigations or inspections — up to EUR 28 962;
11) upon persons failing to fulfill the requirements, other than provided for in Paragraphs 1-10 of Article 52(1) of this Law and its implementing legal acts — up to EUR 28 962;
2. If a legal entity belongs to a parent company, total annual income, according to which the amount of fine to be imposed is determined in accordance with Paragraph 1 of Article 52(1) of this Law, shall be the income referred to in the parent company’s consolidated financial statement for the last year.
3. If income or such other material benefits are illegally received or losses are avoided as a result of violations referred to in Paragraph 1 or 2 of Article 52(1) of this Law and the amount of such income, other material benefits, or losses avoided, if it can be determined, exceed half of the amount of fines referred to in Paragraph 1 or 2 of Article 52(1), the supervisory authority shall have a right to impose fine up to a double amount of illegally received income, such other material benefits, or losses avoided.
4. Where the violation referred to in Paragraph 1 of Article 52(1) of this Law is inflicted by a legal entity or the violation referred to in Paragraph 2 of Article 52(1) of this Law is inflicted by a natural person, the supervisory authority shall impose a higher fine of the fines referred to in the provisions of these Paragraphs and Article 52(3).
Article 53. Procedure on the Enforcement of Decisions Made by the Supervisory Authority
1. Fines shall be paid to the state budget not later than within one month from the day the person received a decision of the supervisory authority on the imposition of a fine.
SECTION SIX
CEASING OF A LEGAL ENTITY ESTABLISHED IN
THE REPUBLIC OF LITHUANIA TO BE CONSIDERED AN ISSUER
Article 54. Ceasing of a Legal Entity Established in the Republic of Lithuania to be Considered an Issuer
1. On the request and documents submitted by the legal entity seeking to waive the status of an issuer the supervisory authority shall pass a decision to cease to consider that legal entity established in the Republic of Lithuania an issuer in the presence of at least one of the following conditions:
1) non-equity securities are being redeemed the public offering whereof or the admission to a regulated market was subject to the requirements of this Law;
2) the mandatory selling or buy-up of securities of the issuer has been completed to be implemented;
3) where his shareholders by a qualified majority (that may not be less than 2/3 of the votes attached to the shares of the shareholders present at the meeting) decided not to offer the shares publicly;
2. In the case referred to in Paragraph 3 of Article 54(1) of this Law the company must submit and implement a takeover bid to buy-up the shares of the company. Such takeover bid shall be subject to the provisions of Article 39(1-7) and Article 43(3, 5, and 6) of this Law.
3. If the issuer’s shares were admitted to trading on a regulated market operating in the Republic of Lithuania and the general meeting of shareholders passed a decision not to offer shares publicly together with the decision to delist shares from trading on a regulated market, it shall be suffice to submit a takeover bid once and implement it according to the procedure provided for in Article 38 of this Law.
4. The legal entity must, within 3 working days from receipt of notification on the decision of the supervisory authority to cease to consider it an issuer, publish an information notification in the manner stipulated in Article 28 of this Law.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
RESIDENT OF THE REPUBLIC VALDAS ADAMKUS
Annex to the Law on Securities of the Republic of Lithuania
LEGAL ACTS OF THE EUROPEAN UNION IMPLEMENTED BY THIS LAW
1. Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission of securities to official stock exchange listing and on information to be published on those securities (OJ, 2004, Special edition, Chapter 06, Volume 04, p. 24).
2. Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading and amending Directive 2001/34/EC (OJ, 2004, Special edition, Chapter 06, Volume 06, p. 356) as last amended by Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 (OJ 2010 L 331, p. 120).
3. Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids (OJ, 2004, Special edition, Chapter 17, Volume 02, p. 20) as last amended by Directive 2014/59/EU of the European Parliament and of the Council (OJ 2014 L 173, p. 190).
4. Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC (OJ 2004 L 390, p. 38), as last amended by Directive 2010/78/EC (OJ 2010 L 331, p. 120) of 24 November 2010 of the European Parliament and of the Council.
5. Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ 2009 L 302, p. 1) as last amended by Regulation (EU) No. 462/2013 of the European Parliament and of the Council of 21 May 2013 (OJ 2013 L 146, p. 1).
6. Directive 2010/73/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 2003/71/EC on the prospectus to be published when securities are offered to the public or admitted to trading and 2004/109/EC on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market (OJ 2010 L 327, p. 1).
7. Directive 2013/50/EU of the European Parliament and of the Council of 22 October 2013 amending Directive 2004/109/EC of the European Parliament and of the Council on the harmonization of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market, Directive 2003/71/EC of the European Parliament and of the Council on the prospectus to be published when securities are offered to the public or admitted to trading, and Commission Directive 2007/14/EC laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC (OJ 2013 L 294, p. 13).
Amendments:
1.
The Seimas of the Republic of Lithuania, Act
No. X-1592, 06/06/2008, Official Gazette, 2008, No. 71-2718 (21/06/2008)
AMENDMENT ACT OF ARTICLE 48 OF THE LAW ON SECURITIES
2.
The Seimas of the Republic of Lithuania, Act
No. XI-393, 22/07/2009, Official Gazette, 2009, No. 93-3985 (04/08/2009)
LAW ON FINANCIAL SUSTAINABILITY
Outline of the application of the Law on Securities
Where the state acquires shares of the bank, the provisions of Section Four of the Law on Securities shall not apply.
3.
The Seimas of the Republic of Lithuania, Act
No. XI-568, 15/12/2009, Official Gazette, 2009, No. 154-6949 (28/12/2009)
SUPPLEMENT AND AMENDMENT ACT OF ARTICLES 2, 5, 31, 35, 36, 37, 38, 39 OF THE LAW ON SECURITIES
This act enters into force on 1 October 2010.
Amendment act:
3.1.
The Seimas of the Republic of Lithuania, Act
No. XI-1035, 23/09/2010, Official Gazette, 2010, No. 116-5917 (30/09/2010)
AMENDMENT ACT OF ARTICLES 1, 2, 3 OF SUPPLEMENT AND AMENDMENT ACT OF ARTICLES 2, 5, 31, 35, 36, 37, 38, 39 OF THE LAW ON SECURITIES
4.
The Seimas of the Republic of Lithuania, Act
No. XI-876, 03/06/2010, Official Gazette, 2010, No. 72-3611 (22/06/2010)
SUPPLEMENT AND AMENDMENT ACT OF ARTICLES 2, 3, 4, 5, 15, 18, 19, 21, 22, 23, 24, 27, 29, 31, 32, 34, 35, 37, 38, 39, 42, 45, 46, 47, 48 OF THE LAW ON SECURITIES
5.
The Seimas of the Republic of Lithuania, Act
No. XI-1673, 17/11/2011, Official Gazette, 2011, No. 145-6819 (01/12/2011)
AMENDMENT ACT OF THE LAW ON SECURITIES
This Law was amended:
5.1.
The Seimas of the Republic of Lithuania, Act
No. XI-1882, 22/12/2011, Official Gazette, 2011, No. 163-7771 (31/12/2011)
AMENDMENT ACT OF ARTICLE 1 OF THE AMENDMENT ACT OF THE LAW ON SECURITIES
This act enters into force on 1 January 2012
6.
The Seimas of the Republic of Lithuania, Act
No. XI-2123, 26/06/2012, Official Gazette, 2012, No. 77-3978 (01/07/2012)
SUPPLEMENT AND AMENDMENT ACT OF ARTICLES 2, 3, 4, 19, 27, 38 OF THE LAW ON SECURITIES AND ACT OF SUPPLEMENTING THE LAW WITH ARTICLE 47(1)
7.
The Seimas of the Republic of Lithuania, Act
No. XII-148, 17/01/2013, Official Gazette, 2013, No. 11-495 (30/01/2013)
SUPPLEMENT AND AMENDMENT ACT OF ARTICLES 2, 4, 5, 6, 7, 9, 10, 12, 15, 20, 23, 25, 26, 27, 31, 33, 34, 37, 38, 42, 46, 48 OF THE LAW ON SECURITIES, ACT OF SUPPLEMENTING THE LAW WITH ARTICLE 6(1) AND SECTION FIVE (1), AND ANNEX TO THE LAW
Amendments:
1.
The Seimas of the Republic of Lithuania, Act
No. XII-1109, 23/09/2014, published TAR 02/10/2014, i. k. 2014-13415
Amendment act of Article 47 of the Law on Securities No. X-1023 of the Republic of Lithuania
2.
The Seimas of the Republic of Lithuania, Act
No. XII-1471, 18/12/2014, published TAR 31/12/2014, i. k. 2014-21130
Amendment act of Articles 46, 47 and the annex to the Law on Securities No. X-1023 of the Republic of Lithuania