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Capital Markets in Slovenia

Capital Markets in Slovenia

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Contributed by Jadek & Pensa.

1. Market Overview

Equity capital markets and debt capital markets are somewhat underdeveloped in Slovenia compared to their Western EU counterparts. The Ljubljana Stock Exchange, which celebrated 30 years of existence in 2019, is the main market for the admission of equity, debt, and other instruments. However, the liquidity of the market is on the weaker side, even though a few new liquidity providers were added in the last few years. In Slovenia SMEs typically resort to classic debt financing through banks and very rarely turn to capital markets to seek funding. Therefore, companies that participate in the Ljubljana Stock Exchange through the admission of equity, debt, or other instruments are predominantly older, larger companies.

The last major IPO on the Ljubljana stock exchange was the listing of the stock of Nova Ljubljanska Banka, the largest Slovenian bank, in 2018 for a total amount of EUR 1.03 billion. In 2022, Mercator, one of the largest retailers in Slovenia, went private and was delisted from the Ljubljana stock exchange following the acquisition and squeeze-out of a minority shareholder by Fortenova Group. This follows the continuous pattern of delisting of companies from the Ljubljana Stock Exchange in recent years.

The majority of transactions on the Ljubljana stock exchange in 2021 involved shares (transactions with shares amounted to slightly more than EUR 379 million) followed by transactions with bonds (transactions with bonds amounted to slightly more than EUR 0.2 million). The average daily number of regular transactions was 129,60 and the average value of each regular transaction amounted to EUR 9,775.50. The Mercator shares had the highest profitability in 2021 (163.16 %), however, the highest volume of transactions was performed with the shares of Slovenian pharmaceutical company Krka, which also generated the highest average daily traffic in 2021.  One of the most notable events was the accession of the Cinkarna Celje shares to the Prime market and the listing of EFTs on the Ljubljana Stock Exchange. In general, the Slovenian stock index SBITOP ended the year 2021 among the best-performing markets in the world, gaining 39.8% and ending the year with the highest value on December 29, 2021. However, the total number of transactions has dropped by 23.6% compared to a year before.

2. Overview of the local stock exchange and listing segments (markets)

2.1. Regulated market

The Ljubljana Stock Exchange is the only stock exchange in the Republic of Slovenia. The equity market is divided into the Prime market and the Standard market. The Prime market is the elite part of the equity market, intended for companies that stand out for their liquidity, size, and transparency of operations. It is designed to increase the reputation of the best Slovenian companies in front of international investors. Companies that are listed on the Prime market have to fulfill additional reporting standards and their stocks usually have higher liquidity than those in other segments of the market. Both markets are regarded as “regulated markets” under the EU Directive on Markets in Financial Instruments (No. 2014/65/EC) (MiFID II) and the Slovenian Market in Financial Instruments Act (ZTFI-1).

Stocks that are listed on the Standard market fulfill the basic conditions for listing on the stock exchange but are not yet mature enough for a more advanced trading segment. Companies whose stocks are listed on the Standard market meet the disclosure standards pursuant to Slovene legislation.

The Bonds market of the Ljubljana Stock Exchange is structured into Bonds and Money Market Instruments. Money Market Instruments are further subdivided into treasury bills and commercial papers. An additional market is the Structured Products Market, which is subdivided into Closed-end fund shares, Fund market, Certificates, Warrants, Rights, and other products. For listings on the Bonds market, similar criteria as for the stock exchanges is applicable. Nevertheless, for open-end and closed-end funds, additional criteria apply to regulating asset management companies.

2.2. Non-regulated market

The Ljubljana Stock Exchange also operates SI ENTER, a multilateral trading facility (MTF). The purpose of SI ENTER is to enable trading in securities that are not listed on the regulated market with the purpose of enhancing transparency and achieving a better price formation than in the OTC market. SI ENTER also serves the purpose of listing securities of start-ups and SMEs, that do not meet the requirements or lack sufficient funding to be listed on the regulated market (See section 2.1.). SI ENTER market provides for less transparency compared to the regulated market (described above under point 2.1). The transparency requirements for the SI ENTER as MTF are regulated with the applicable legislation, i.e., EU Markets in Financial Instruments Regulation (No. 600/2014) (MiFIR) as well as the SI ENTER rules.

SI ENTER is subdivided into three segments: (i) the ADVANCE Segment, (ii) the BASIC Segment, and (iii) the PROGRESS Segment. The main difference between the ADVANCE and PROGRESS Segments on one side and the BASIC Segment on the other side is that shares listed in the BASIC Segment are not listed upon the request of the issuer but as a consequence of the interest of traders. Accordingly, there are no additional reporting and disclosure obligations imposed on the issuers in the BASIC Segment, therefore transparency level is low, and investing in BASIC Segment is associated with higher risk. The main difference between ADVANCE and PROGRESS Segments is that PROGRESS Segment requires additional reporting and disclosures and is associated with higher costs, therefore it is more appropriate for more mature issuers that are preparing to be listed at one of the “regulated markets” (See section 2.1.). The three SI ENTER Segments are subdivided as follows: 

  • ADVANCE Segment, which includes:
  • ADVANCE SHARES – greater transparency of operations compared to BASIC Segment, meant for shares, share-equivalent securities representing a share in membership rights of legal persons and GDRs related to shares or share equivalent securities, listed on the basis of the issuer application
  • ADVANCE BONDS – meant for bonds, other types of securities containing monetary obligation of the issuer, and GDRs related to these securities, listed on the basis of the issuer application
  • ADVANCE COMMERCIAL PAPERS – meant for commercial papers, listed on the basis of the issuer application
  • BASIC Segments. The purpose of the BASIC Segment is to allow traders to trade with shares for which trading interest among traders exists, to avoid OTC trading with such shares. As the shares are not listed on the basis of an application of the issuer, the issuer does not have any additional obligations or costs associated with the listing on the BASIC segment. The only sub-segment of the BASIC Segment is:
  • SHARES SLOVENIA – lower transparency of operations, only issuers with registered offices in the Republic of Slovenia, listed on the basis of an invitation of the exchange.
  • PROGRESS Segment, which is a segment shared between Ljubljana Stock Exchange and Zagreb Stock Exchange. In comparison to the ADVANCE Segment, which is a segment of the Ljubljana Stock Exchange only, the PROGRESS segment requires additional reporting of companies and is associated with higher costs for the issuer (among other requirements, at the time of listing as well as for an additional two-year period the issuer has to have a contract concluded with one of the advisors officially registered with the Progress MTF). In this sense, the PROGRESS Segment is closer to the “regulated markets” (See section 2.1.). PROGRESS Segment is therefore advisable to issuers who are preparing to be listed with the “regulated markets.” Currently, there are no Slovenian companies listed in the PROGRESS Segment. The PROGRESS Segments are sub-divided to:
  • PROGRESS SHARES – additional reporting and discloser requirements compared to ADVANCE Segment, meant for shares, share-equivalent securities representing a share in membership rights of legal persons and GDRs related to shares or share equivalent securities, listed on the basis of the issuer application
  • PROGRESS BONDS – additional reporting and discloser requirements compared to ADVANCE Segment, meant for bonds, other types of securities containing monetary obligation of the issuer, and GDRs related to these securities, listed on the basis of the issuer application
  • PROGRESS COMMERCIAL PAPERS – additional reporting and discloser requirements compared to ADVANCE Segment, meant for commercial papers, listed on the basis of the issuer application.

3. Key Listing Requirements

The listing process and listing requirements for listing equity and debt securities on Ljubljana Stock Exchange are regulated in the Stock Exchange Rules (“Pravila borze,” the LJSE Rules).

3.1. ECM

As mentioned above, stocks can be listed and traded on Ljubljana Stock Exchange in two market sub-segments:

  • Standard Market
  • Prime Market

Listing requirements for Standard Market

For a company’s shares to be listed on the Standard Market the following requirements shall be fulfilled (Articles 8 and 9 of the LJSE Rules):

  • regarding the legal standing of the issuer:
  • established and operating under the law of the country of its establishment;
  • obtainment of LEI code;
  • regarding the publication of the prospectus and other information pursuant to the ZTFI-1:
  • if publication of the prospectus is required; obtaining the Securities Market Agency (ATVP) decision on the approval of the prospectus; the prospectus needs to be submitted to the Ljubljana Stock Exchange before listing;
  • if publication of the prospectus is not required due to the application of the exceptions: notification to ATVP; such notification needs to be submitted to the Stock Exchange before listing;
  • regarding transferability:
  • the shares listed need to be freely transferable;
  • regarding share issuance and trade settlement mechanism:
  • the shares need to be validly issued and the requirements for reliable settlement of trades need to be fulfilled (this condition is fulfilled if the shares of the issuer established in Slovenia are issued as book-entry securities and entered in the central register).

The companies whose stocks are listed on the Ljubljana Stock Exchange need to fulfill the above-stated requirements throughout the trading of their shares on the Ljubljana Stock Exchange. Furthermore, companies shall also comply with the LJSE Rules and other applicable regulations as well as decisions adopted by the Ljubljana Stock Exchange and its management.

Listing requirements for Prime Market

For the stocks to be listed on the Prime Market all the listing requirements for listing on the Standard Market stated above need to be fulfilled as well as the following additional requirements (Article 11 of the Rules): 

  • share class:
  • shares need to be issued as ordinary shares which give their holders one vote;
  • quantitative criteria:
  • operation of the company for at least three years before listing;
  • audited annual reports for the past three financial years;
  • a minimum value of the capital shall be EUR 10 million or an amount in other currency, which is equal;
  • percentage of the shares held by the public: at least 25% (or less than 25%, provided that the Stock Exchange decides that the requirement is fulfilled if it assesses that due to a large number of shares of the same class and the volume of its sale to the public, the market will still function properly);
  • disclosure requirements and publication of statements, whit which the issuer undertakes:
  • to disclose information and report also in accordance with International Financial Reporting Standards (IFRS);
  • to publish summaries of the public announcements both in Slovenian and English language;
  • to publish interim business information (quarterly reports or interim statements), the financial calendar, and the declarations of compliance with the Corporate Governance Code;
  • to strive to the best of the abilities to meet the best practices of disclosure, as stipulated by the Guidelines, published by the management of the Stock Exchange.

3.2. DCM

Debt securities trading on the Ljubljana Stock Exchange are bonds and money market instruments, such as treasury bills, commercial papers, and certificates of deposit in connection with the bonds (Article 6(3) of the LJSE Rules).

Bonds

According to Article 40 of the LJSE Rules, for listing the bonds on Ljubljana Stock Exchange, the same requirements need to be fulfilled as for listing stock on the Standard Market. Furthermore, the issuer or the person requesting the listing of the bonds on the Stock Exchange needs to comply with the obligation on the publication of the prospectus in accordance with ZTFI-1.

Money market instrument

Money market instruments (treasury bills and commercial papers) shall be listed on Ljubljana Stock Exchange provided that (Article 45 of the LJSE Rules):

  • they are freely transferable;
  • they are validly issued and the conditions for reliable settlement of trades are fulfilled;
  • basic information regarding the money marker instrument is published; and
  • an administrative fee is paid.

Other

According to the LJSE Rules, special provisions and listing requirements may apply for listing the securities of the issuers having their seat in other EU Member States and third countries. 

4. Prospectus Disclosure

The prospectus is a key document that needs to be published when the securities are offered to the public or when the admission of securities on a regulated market situated or operating within a Member State is sought. 

In Slovenia, matters concerning the preparation and content of the prospectus are primarily governed by the directly applicable Regulation (EU) 2017/1129 of June 14, 2017 (Prospectus Regulation), the Commission Delegated Regulation (EU) 2019/980 of March 14, 2019, concerning the format, content, scrutiny and approval of the prospectus, and the Commission Delegated Regulation (EU) 2019/979 of March 14, 2019 concerning regulatory technical standards on key financial information in the summary of a prospectus, the publication and classification of prospectuses, advertisements for securities, supplements to a prospectus, and the notification portal.

Since Prospectus Regulation repealed the previously valid Directive 2003/71 of November 4, 2003, on the prospectus to be published when securities are offered to the public or admitted to trading, the majority of the matters concerning the prospectus are now uniformly regulated on the European level. Only a minority of matters are therefore left to the individual Member States to regulate. In Slovenia, certain matters regarding the prospectus are thus still regulated in the ZTFI-1, however, no provisions apply to the content of the prospectus and disclosure requirements.

According to the Prospectus Regulation, the prospectus shall be written and presented in an easily analyzable, concise, and comprehensible form so that it enables the investors to make informed investment decisions. The information presented shall be sufficiently and objectively presented in a single document or separate documents. As a general rule, the prospectus shall therefore include essential information, which allows the investors to make an informed assessment of the financial situation of the issuer or guarantor (the assets and liabilities, profits and losses, financial position, prospects), the rights attaching to the securities, reasons for the issuance as well as its impact on the issuer.

Article 16 of the Prospectus Regulation emphasizes the importance of disclosing the risk factors to ensure that investors make an informed assessment of such risks and thus take investment decisions with full knowledge of the facts. The risk factors included in the prospectus shall be limited to risks that are specific to the issuer and/or to the securities and which are material for taking an informed investment decision. The prospectus also needs to include an assessment of the materiality of the risk factors based on the probability of their occurrence and the expected magnitude of their negative impact. Risk factors shall be presented in a limited number of categories depending on their nature and shall be adequately described, explaining how they affect the issuer or the securities being offered or to be admitted to trading.

The Prospectus Regulation stipulates that the European Commission shall adopt delegated acts and further regulate the content of the prospectus. The Commission did so and issued Commission Delegated Regulation 2019/980, which in detail provides the information that needs to be included in each type of prospectus.

According to the Commission Delegated Regulation 2019/980, the prospectus shall therefore, inter alia, consist of:

  • Information regarding the issuer, its organizational structure, administrative, management, and supervisory bodies, remunerations and benefits policy, board practices, as well as persons responsible for information provided in the prospectus.
  • Risk factors as provided in detail above.
  • Business overview, including principal activities and markets, strategies and objectives, and important events in the development of the issuer’s business and investments.
  • Operating and financial review, including the financial condition of the issuer and the issuer’s likely future development.
  • Regulatory environment.
  • Trend overview in the operational and financial field.
  • Information about the employees and related shareholding and stock option plans.
  • Major shareholders, including any potential differences in voting rights as well as information on whether the issuer is directly or indirectly controlled and by whom.
  • Related party transactions that the issuer has entered into during the period covered by the historical financial information and up to the date of the prospectus.
  • Financial information about the issuer, including audited historical financial information covering the latest three financial years (or such shorter period as the issuer has been in operation) and the audit report in respect of each year prepared in accordance with the IFRS.
  • Information about any (legal) proceedings (including any such proceedings which are pending or threatened of which the issuer is aware), during a period covering at least the year which may have, or have had in the recent past significant effects on the issuer and/or group’s financial position or profitability, or provide an appropriate negative statement.

Since a prospectus is a complex and extensive document, the prospectus shall include a summary aiding the investors when considering whether to invest in a security or not. It shall be written in a way that is easy to read, using characters of readable size, and written in a language and a style that facilitates the understanding of the information, in particular, in language that is clear, non-technical, concise, and comprehensible for investors. A summary shall therefore include key information that investors need in order to understand the nature and the risks of the issuer, the guarantor, and the securities that are being offered or admitted to trading on a regulated market. In accordance with Article 7 of the Prospectus Regulation, a summary should include the following four sections: (i) introduction, containing the prescribed warnings, (ii) key information on the issuer, (iii) key information on the securities as well as (iv) key information on the offer of securities and/or the admission to trading on a regulated market.

4.3 Local market practice considerations

As evident above, there are fewer offerings of securities in the Slovenian market compared to other European markets. The continuing issue remains the low level of liquidity. The trend in the issuance of new securities and the volumes of financing of businesses on the capital market is not encouraging neither in the equity nor in the debt sector. This is likely due to the fact that businesses in Slovenia usually seek funding sources within the banking sector and not in the capital markets. As the capital markets are not as developed in Slovenia as in certain other EU countries, there is no particular local market practice in relation to drafting and content of the prospectus.

Nevertheless, in 2021, the Ljubljana Stock Exchange was listed as one of the most profitable stock exchanges in the world, despite the lingering effects of the COVID-19 pandemic.

4.4. Language of the prospectus for local and international offerings

According to Article 27 of the Prospectus Regulation, the language of the prospectus depends on the territory where the securities are offered to the public or where admission on a regulated marker is sought. Provided that the securities are offered to the public or admission to trading on a regulated market is sought:

  • only in Slovenia as a home Member State, then the prospectus shall be prepared in the Slovenian language only (Article 27(1) of the Prospectus Regulation).
  • in the home Member State, namely Slovenia, and in other host Member States, then the prospectus shall be prepared in the Slovenian language, however, it shall also be available in the language accepted by the competent authorities of each host Member State or in the language which is customary in the sphere of international finance, at the choice of the issuer, the offeror, or the person asking for admission to trading on a regulated market (Article 27(3) of the Prospectus Regulation).
  • in other Member states (rather than the host Member State), the prospectus shall be prepared either in a language accepted by the competent authorities of those Member States or in a language customary in the sphere of international finance, at the choice of the issuer, the offeror or the person asking for admission to trading on a regulated market.

Nevertheless, according to paragraph 2 of Article 27(2) of the Prospectus Regulation, the competent authority of each host Member State shall require that the prospectus summary referred to in Article 7 be available in its official language, or at least one of its official languages, or in another language accepted by the competent authority of that Member State, but it shall not require the translation of any other part of the prospectus.

In the case where non-equity securities are offered to the public or admission to trading of non-equity securities on a regulated market is sought by one or more Member States, the prospectus shall be drawn up either in a language accepted by the competent authorities of the home and host Member States or in a language customary in the sphere of international finance, at the choice of the issuer, the offeror or the person asking for admission to trading on a regulated market. Such obligations apply only if such non-equity securities are to be traded only on a regulated market, or a specific segment thereof, to which only qualified investors can have access for the purposes of trading such securities or such securities have a denomination per unit of at least EUR 100,000 (Article 27(5) of the Prospectus Regulation).

5. Prospectus Approval Process

5.1. Competent authority/regulator 

In Slovenia, ATVP is competent for all matters related to the publication of the prospectus and is responsible for monitoring compliance with the provisions of the prospectus.

5.2. Timeline, review, and approval process

The prospectus approval process is regulated in the Prospectus Regulation, Commission Delegated Regulations as well as in ZTFI-1. Furthermore, ATVP has adopted Guidelines on the prospectus review and approval process (Smernice o postopku pregleda in potrditve prospekta, Guidelines) which further regulate the prospectus review and approval process according to the Commission Delegated Regulation 2019/980.

The request for the approval of the prospectus for the offering of the securities to the public shall be submitted by the issuer or the offeror. In case the approval of the prospectus relates to the admission of securities to trading on a regulated it shall be submitted by the offeror or other person asking for admission to trading on a regulated market.

The request for the approval of the prospectus shall include the draft prospectus, confirmation on the payment of the administrative fee, a list of cross-references as well as all information required under point 2 of Article 42 of the Commission Delegated Regulation 2019/980. In the event that the request for approval relates to the approval of the prospectus for the first offering of the securities, then such a request shall also include the resolution of the complement authority of the issuer regarding its issuance. The request together with the required attachments shall be submitted to ATVP in electronic form via email to This email address is being protected from spambots. You need JavaScript enabled to view it..

Once the request with the above-mentioned attachments is submitted, ATVP shall inform the issuer, offeror other person asking for admission about the receipt of the documentation no later than the end of the second business day following the receipt of the request.

If during the review process ATVP finds that the draft prospectus does not meet the standards of completeness, comprehensibility, and consistency from the Prospectus Regulation, ZTFI-1, and Commission Delegated Regulation 2019/980 it shall inform the person submitting the request about the deficiencies within 5-20 business days (depending on the type of prospectus) and shall clearly specify the changes or supplementary information that need to be supplemented. ATVP emphasized in its Guidelines that it usually issues one or two such resolutions on remedying the deficiencies during each prospectus review process.

The final version of the prospectus shall be submitted to ATVP electronically and shall be signed by the authorized persons of the offeror or, if necessary, by other responsible persons (i.e., guarantors). The form of the final version of the prospectus is prescribed by the Article 44 of the Commission Delegated Regulation 2019/980.

ATVP shall reject the request if the request was not submitted by an eligible person or the prospectus is not compliant with the relevant legislative provisions or if the prospectus was not amended in accordance with ATVP’s resolution within a set deadline.

Once the prospectus includes all the requested information and once all the vague and conflicting information in the prospectus have been amended or corrected accordingly, ATVP shall approve the prospectus and issue its decision. ATVP will approve the prospectus provided that the request was submitted by the eligible person (issuer, offeror other person asking for admission to trading on a regulated market as it may be) and if the prospectus is compliant with all the requirements from the Prospectus Regulation, the applicable provision of ZTFI-1 and Commission Delegated Regulation 2019/980.

ATVP informs the issuer, the offeror, or the person asking for admission about its decision in writing by email as well as by post. ATVP shall issue a decision approving the prospectus:

  • within 10 business days from the receipt of the request; however, the deadline shall only be applicable for the initial submission of the draft prospectus and not for subsequent amendments of the draft prospectus;
  • within 20 business days in case of an initial public offering, namely where the offer to the public involves securities issued by an issuer that does not have any securities admitted to trading on a regulated market and that has not previously offered securities to the public;
  • within five business days from receipt of the request in the case of a prospectus consisting of separate documents produced by frequent issuers.

Provided that the decision is not issued within the prescribed deadline, such a failure shall not be deemed to constitute approval of the prospectus.

6. Listing Process

6.1. Timeline, process with the stock exchange

If the issuer fulfills the conditions and criteria for listing on the Standard Market or for listing on the Prime Market, it may request that its shares are listed on the Ljubljana Stock Exchange. The process is governed by the LJSE Rules.

Under LJSE Rules, the application for listing stocks consists of a signed and completed application form and the Listing Agreement. The application and all other documentation should be in Slovenian or English. Alternatively, the documents may be filed in a different language, together with a certified translation into Slovenian or English. The deadline for the decision of the Stock Exchange regarding the listing is set to 30 days after the Stock Exchange received the application to be listed. However, the Stock Exchange may request additional information within eight days after the receipt of the application. In such case, the deadline for the decision of the Stock Exchange shall be prolonged.

In case all the conditions and criteria are fulfilled, the Stock Exchange signs the Listing Agreement and issues the decision on listing of the stocks. Before trading with the listed stocks may be initiated the applicant has to publish any potential supplement to the prospectus and pay the requested listing fee. If such obligations are fulfilled before Ljubljana Stock Exchange issues the decision on the listing, the date the trading is initiated is stated in the decision on the listing. However, if the applicant fails to timely fulfill its obligations and trading is not initiated within three months after the listing of the stocks, Ljubljana Stock Exchange may remove the stocks from trading. In such cases, both the Listing Agreement and the Stock Exchange’s decision on listing cease to be valid.

In the case of bonds, the same procedure as described for the procedure of listing of stocks applies, insofar as the conditions and criteria for listing are fulfilled, the applicant fulfills its obligations relating to the publishing of the prospectus and other information, and completes all requirements prior to initiation of the trading.

7. Corporate Governance

7.1. Corporate governance code/rules (independent director, board and supervisory composition, committees)

The primary source of (binding) corporate governance rules in Slovenia is the Companies Act (ZGD-1). ZGD-1 applies to all companies (public and private corporations, LLCs, sole proprietors, etc.). In accordance with ZGD-1, corporations may opt either for a two-tier or one-tier management system.

If a corporation opts for a two-tier management system, it shall be managed by the management board (consisting of one or more managers) and the management board shall be supervised by the supervisory board (consisting of at least three members). The management board shall be appointed by the supervisory board and shall direct the business operations of the company, represent the company, and act on the company’s behalf. It shall report to the supervisory board. The supervisory board shall be appointed by the general meeting of the company and shall supervise the conducting of the company’s business. The supervisory board may appoint one or more committees (e.g., audit committee, appointment committee, remunerations committee). A committee shall be composed of a chair and at least two members (the chair shall be appointed from among the members of the supervisory board). Committees shall report on their work to the supervisory board.

If a corporation opts for a one-tier system, it shall be managed by a unified board of directors (consisting of at least three members), appointed by the general meeting of the company. The unified board of directors shall manage a company and supervise its operations. In public companies, the unified board of directors shall appoint at least one executive director from among its members; however, no more than one-half of the members of the unified board of directors may be appointed executive directors. Executive directors shall represent and act on behalf of the company unless otherwise provided in the articles of association. The unified board of directors may also delegate certain tasks to the executive directors, including the management of current operations and administration of the books of account. The unified board of directors may appoint one or more committees; in public companies, the appointment of an audit committee is mandatory.

Besides ZGD-1, public companies also observe a legally non-binding Management Code for Publicly Traded Companies (Kodeks upravljanja javnih delniskih druzb, or Management Code), adopted by the Ljubljana Stock Exchange and Slovenian Directors’ Association on October 27, 2016, and as amended on December 9, 2021. The Management Code sets forth recommendations for managing the companies on the basis of the comply or explain principle. The Management Code prescribes rules on, inter alia, the adoption of a management policy, corporate governance statement, and statement on the compliance with the Management Code; the relationship between the company and its shareholders; supervisory board, management board, and board of directors (including on the independence of their members); audit and internal control system; and transparency of business operations.

7.2. Any other ESG considerations

ZGD-1 prescribes that, when necessary, the companies shall include in their yearly business report markers, indicators, and other factors that include information concerning environmental protection and employees. In addition, all public companies are obliged to include in their annual report a description of the diversity policy implemented in relation to representation in the management and supervisory bodies of the company (having regard to gender and other aspects, such as age, education and professional experience, and including an indication of the objectives, modalities, and results of the diversity policy during the reporting period).

Additionally, the (non-binding) Management Code provides that all public companies shall develop and adopt a diversity policy and a sustainable growth policy. Public companies should also disclose a sustainability report, part of which shall be a corporate social responsibility report (touching upon responsibilities of the company to employees, consumers, local community, and environment), and that the remuneration of their management bodies shall promote sustainable development of the company and include non-financial criteria, important to create the long-term value of the company (such as compliance with applicable company rules and ethical standards). The sustainability report should be included in the annual report of the company and published on the company’s website.

8. Ongoing Reporting Obligations (Life as a Public Company)

8.1. Annual and interim financials

Pursuant to ZGD-1 and ZTFI-1, public companies shall report on their financials annually and semi-annually.

They shall prepare their annual report (and consolidated annual report, if applicable) within three months of the end of each financial year. The annual report shall consist of a financial report (i.e., financial statements and notes to financial statements) and a business report. The annual report shall be examined by an auditor (according to the method and under the conditions specified by the legislation governing auditing), who shall audit the financial report and examine the business report to the extent necessary in order to verify whether its content accords with other components of the annual report. The annual report (along with the auditor’s report) shall be published within four months after the end of each financial year.

Additionally, public companies shall also prepare an interim (semi-annual) report for the first six months of each financial year and publish it as soon as practicable and no later than three months after the end of a such six-month period. The semi-annual report shall consist of a summary of the financial report and an interim business report. If the semi-annual report was audited, the auditor’s report shall be published as well. Furthermore, public companies holding listed shares in the Ljubljana Stock Exchange’s Prime market shall also prepare and publish quarterly reports.

Public companies shall ensure that both annual and semi-annual reports are publicly available for at least 10 years after their publication.

Finally, the legally non-binding Management Code also prescribes certain rules on reporting, e.g., that public companies shall include in their business report a governance statement and statement on the conformity with the Management Code (also see Section 7.2. on ESG considerations in reporting).

8.2. Ad hoc disclosures

Public companies are required to disclose information (on an ad hoc basis) that is considered controlled information pursuant to ZTFI-1 and the MAR.

In addition to the annual and semi-annual reports, controlled information is especially information on (i) any changes to major holdings notified to the public company by the shareholder or other entity; (ii) change in the share of the own (treasury) shares held by the public company; (iii) change in the total number of voting shares; (iv) change in the content of the rights arising from securities; and (v) inside information (as defined in the MAR). Public companies shall also publish the information on their general meetings and certain other information.

The controlled information should be disclosed by the issuer as soon as possible and at the latest within the time limits prescribed for each type of controlled information by ZTFI-1 and the MAR, in a manner that ensures rapid access to that information on a non-discriminatory basis. The disclosure of controlled information must contain all information that enables investors to assess the position of the public company and to assess the impact of the controlled information on the price of the issuing financial instrument. When a public company or another person who has requested the listing of securities on a regulated market without the consent of the public company discloses controlled information, it shall at the same time submit the contents of that disclosure to ATVP. It should be noted that, under certain conditions set forth in the MAR, the issuer may (on its own responsibility) delay disclosure to the public of inside information. The issuer should also inform the competent authority, i.e., ATVP, on the delayed disclosure of inside information in accordance with Article 17 of the MAR.

Finally, ad hoc disclosures are also regulated in applicable legally non-binding documents. The Management Code prescribes that public companies shall ensure timely and accurate public disclosure of all controlled and other relevant business information. Such information includes e.g., information about the company, financial position, business, ownership, management of the company, and future expectations, as well as other information that has an impact on the position of investors). Furthermore, Ljubljana Stock Exchange has issued the Recommendations on Reporting of Public Companies (Priporocila javnim druzbam za obvescanje, or the Recommendations). The purpose of the Recommendations is to define the disclosure standards of public companies holding listed shares in the Ljubljana Stock Exchange’s Prime market and they are intended to set forth good practices with regard to the disclosure of inside information and other types of controlled information. Note that, despite the general non-binding nature of the Recommendations, some of the provisions of the Recommendations are nevertheless binding for public companies holding listed shares in the Ljubljana Stock Exchange’s Prime market (e.g., mandatory quarterly reporting, reporting in English, a statement on the compliance with the Management Code).

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Guide Contributors For Slovenia

Ozbej Merc

Senior Partner

Ozbej.Merc@jadek-pensa.si

+386 1 234 25 20

Nastja Merlak

Partner

Nastja.Merlak@jadek-pensa.si

+386 1 234 25 20

Ana Bokalic

Associate

ana.bokalic@jadek-pensa.si

+386 1 234 25 20