The amended notification regime for major holdings (Transparency Directive 2013/50/EU) is analyzed in this chapter. It is questioned whether this regime successfully targets hidden control structures or whether the emergence of alternative modes of control in group structures once again challenges the scope of major holding disclosure. The 2013 Directive introduced several new provisions of which financial instruments should be included when calculating the different thresholds for notification of major holdings of shares in companies. The chapter analyzes and discusses different types of holdings, including contract rights related to shareholdings, and how they should be aggregated under the Transparency Directives (horizontal aggregation). It furthermore discusses the extent to which a parent company’s holdings should be aggregated with holdings held by affiliated entities (vertical aggregation). The chapter concludes with reflections on a mismatch between horizontal and vertical aggregation, which potentially can be used to circumvent the disclosure of major holdings and thereby to facilitate “shadow business.”

This chapter explains the why, what, and how of the book. In the chapter, the term shadow business is explained and defined as a societal concern that necessitates further research. The remedy of the information asymmetry that shadow business represents is group transparency. If, however, transparency is a value that requires legal commitments, then it needs to be operationalized. This means that it should be possible to derive legal obligations and that this helps realize transparency as an objective. This can arguably only be achieved where the term “transparency” is precisely defined. This chapter discusses transparency in light of three aspects and whether and to what extent a disclosure regime facilitates accessible, high-quality, and processable information, and the underlying goal is the avoidance of information asymmetry.

This chapter analyzes the extent to which accounting law, a foundational legal domain for determining corporate control for consolidation purposes, addresses de facto control. De facto control is not a harmonized concept in EU secondary law through accounting regulation. However, listed companies in EU Member states are obliged to report in accordance with IFRS; private limited liability companies follow consolidation requirements set out in domestic transpositions of the Accounting Directive.