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Watchdog Proposes Changes to Takeover Act to Boost Market

Ljubljana, 21 March (STA) - Slovenia's stock market watchdog has proposed a series of changes to takeover legislation, including an increase in the ownership threshold obligating an owner to publish a takeover offer, in an effort to boost liquidity on Slovenia's floundering capital market.

In a motion sent to the Economic Development and Technology Ministry, the Securities Market Agency argues the 25% takeover threshold - the holding limit after which the owner is bound to publish a public takeover offer - is too low.

Highlighting that 25% of voting rights is among the lowest in the EU, it proposes raising the threshold to a third. This would allow owners more leeway in obtaining a meaningful say in a company without having to publish a takeover offer.

"This would increase the appeal for investing among large investors and subsequently improve liquidity on the market, thereby increasing the security and price stability of stocks."

Along with the increase in the threshold, the agency also proposes liberalisation of legislation dealing with investment funds and requirements for investment policies of pension funds.

"Poor liquidity on the capital market must be dealt with immediately; not only does this have a negative impact on the value of shares on the Ljubljana Stock Exchange, it also affects the portfolio value of institutional and small shareholders."

Due to poor liquidity Slovenia is losing appeal as an investment destination among domestic and foreign investors, the agency added.

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