Arrowstreet Capital fined for incorrect reporting of short positions

---

Autoriteit Financiële Markten (AFM) Postbus 11723 1001 GS Amsterdam Telephone […] […] www.afm.nl Public version Decision to impose an administrative fine Decision of the Dutch Authority for the Financial Markets (AFM) to impose an administrative fine of €297,000 on Arrowstreet Capital, Limited Partnership for infringement of Regulation (EU) No 236/2012 (Short Selling Regulation).1 Our reference: […] Date: 20 April 2026 1 Dutch name: Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps.

Date: 20 April 2026 Reference: […] Page: 1 of 6 1 1 Summary Arrowstreet Capital, Limited Partnership (Arrowstreet) is an investment manager based in Boston, Massachusetts (United States). Arrowstreet held short positions in shares of Just Eat Takeaway.com N.V. (Just Eat Takeaway.com) and Galapagos NV, both listed on Euronext Amsterdam. Under the Short Selling Regulation (SSR), (legal) persons are required to report net short positions to the AFM when reaching or crossing certain threshold levels, starting at 0.2% of the company's issued share capital. These net short positions must also be disclosed to the public at thresholds from 0.5% onwards. Between 2020 and 2024, Arrowstreet failed to correctly report its net short positions in Just Eat Takeaway.com and Galapagos to the AFM on 101 occasions in total. Due to an error in its calculation methodology, it systematically reported short positions that were too low. In 85 of these cases, Arrowstreet infringed not only the reporting obligation to the AFM but also the disclosure obligation to the public due to this error. The AFM considers this serious and grounds for a fine. Arrowstreet's conduct (self-reporting the shortcomings to the AFM, cooperation with the investigation, measures to prevent recurrence) are grounds for a 30% reduction of the base fine amount. The AFM and Arrowstreet have resolved the fine case through a simplified settlement. This means the case is concluded with this decision imposing a fine of €297,000. The fine decision is further explained below. 2 Course of the investigation and fine procedure Procedure On 22 October 2024, Arrowstreet submitted two reports to the AFM regarding net short positions in the issued share capital of Just Eat Takeaway.com and Galapagos as of 21 October 2024. On the same day, Arrowstreet clarified by email that it had reported too low a percentage for these short positions in earlier reports. Following further email correspondence with the AFM, Arrowstreet withdrew the earlier incorrect reports and submitted corrective reports to the AFM on 20 and 21 November 2024. On 31 July 2025, the AFM sent Arrowstreet an information request regarding the underreporting, to which Arrowstreet responded promptly and fully. On 25 February 2026, the AFM announced its intention to impose an administrative fine on Arrowstreet for infringement of Article 5(1) and Article 6(1) of the SSR. On 4 March 2026, Arrowstreet submitted its written observations on this intention. Observations by Arrowstreet Arrowstreet acknowledges the shortcomings identified by the AFM in the investigation report regarding the reporting of its net short positions in Just Eat Takeaway.com and Galapagos, and regrets that they occurred. In the context of a potential fine imposition, it points out the following: • Testing a new monitoring system in 2024 revealed that too low percentages of net short positions in Just Eat Takeaway.com and Galapagos had been reported in the past. Shortly after discovering these discrepancies, Arrowstreet informed the AFM. Subsequently, Arrowstreet fully cooperated with the AFM's investigation and promptly submitted all reports correctly. • The shortcomings resulted from an error in the calculation methodology used at the time, which incorrectly excluded American Depositary Receipts (ADRs) associated with the short positions from the calculations. With the current advanced system and additional internal controls, errors of this kind are now virtually excluded. • Arrowstreet did not obtain a financial advantage from the incorrect reports. Investors or counterparties will not have suffered damage as a result, given that the reports were made in a timely manner, albeit not reflecting the correct percentages and therefore not always made at precisely the right moment in hindsight. Simplified settlement Arrowstreet indicated openness to a simplified settlement of this case. In this context, consultations resulted in a simplified settlement following the AFM's decision to impose an administrative fine. Arrowstreet acknowledges the shortcomings and accepts the fine; the AFM limits itself to this abbreviated fine decision and reduces the fine amount by 15%. 3 Facts and assessment This chapter contains a presentation and assessment of the facts emerging from the AFM's investigation report, the underlying file, and the observations provided by Arrowstreet. The obligations Under Article 5 of the SSR, Arrowstreet is required to notify the AFM each time its net short position in the issued share capital of a company listed on Euronext Amsterdam reaches or crosses a reporting threshold. The reporting thresholds are 0.2% of the company's issued share capital and every 0.1% above that. Under Article 6 of the SSR, Arrowstreet is required to publicly disclose each time its net short position in the issued share capital of a company listed on Euronext Amsterdam reaches or crosses a disclosure threshold. The disclosure thresholds are 0.5% of the company's issued share capital and every 0.1% above that. Article 9(2) of the SSR stipulates, briefly, that reports and disclosures must take place no later than the next trading day at 15:30 hours. The infringements The corrective reports received showed that Arrowstreet reached or crossed a reporting threshold for its net short positions in Just Eat Takeaway.com and Galapagos on 101 occasions in total without notifying the AFM in accordance with Article 9 of the SSR (infringement of Article 5(1) of the SSR), with 85 of these cases also reaching or crossing a disclosure threshold (infringement of Article 6(1) of the SSR). The two infringements are specified as follows: Just Eat Takeaway.com | Galapagos Number of infringements of Article 5 SSR | 81 | 20 Period | 22-07-2020 to 21-11-2024 | 04-03-2023 to 20-11-2024 Number of infringements of Article 6 SSR | 69 | 16 Period | 08-01-2021 to 21-11-2024 | 25-03-2023 to 20-11-2024 4 Appropriateness: why is the AFM imposing a fine here? The AFM considers it appropriate to impose an administrative fine on Arrowstreet for these infringements and explains this below. Importance of the norm Good compliance by market participants with reporting and disclosure obligations regarding net short positions is of great importance to both supervisors and market participants for several reasons. Received reports enable supervisors to monitor short positions for abuse, market disruption, or systemic risks. They can then conduct investigations and intervene where necessary. The untimely reporting of correct net short positions hinders this supervision, both by the AFM and by foreign supervisors. The disclosure of net short positions provides market participants with important information about significant individual short positions in shares, as it reveals negative market expectations regarding specific companies. This enables investors to make better informed and substantiated investment decisions and prevents information asymmetry.

Date: 20 April 2026 Reference: […] Page: 2 of 6 2 Infringements by Arrowstreet Through its reports over a period of several years, Arrowstreet presented investors and supervisors with an incorrect picture regarding its short positions in two companies listed on Euronext Amsterdam. Although Arrowstreet did report short positions in those companies to the AFM, those reports did not reveal its actual positions, which were considerably larger. These were shares in which frequent trading occurred, also by retail investors. The differences between the reported and actual short positions were often considerable. For Just Eat Takeaway.com, the difference over a shorter period was approximately 0.6%, corresponding to differences in short values of approximately €20 million to €80 million. For Galapagos, the difference over a longer period was approximately 0.8%, corresponding to differences in short values of approximately €10 million to €20 million. The AFM therefore considers the infringements serious overall. Furthermore, Arrowstreet was already addressed by the AFM on 26 June 2020 regarding shortcomings in compliance with reporting obligations for short positions. This concerned four (much) late reports of short positions that had arisen between November 2018 and March 2019. Arrowstreet had thus been warned. Background to infringements and Arrowstreet's conduct Arrowstreet pointed out that the incorrect reports stemmed from an error in the calculation methodology used at the time, that it voluntarily informed the AFM of the earlier incorrect reports and promptly corrected them, that it fully cooperated with the AFM's investigation, and that it took adequate measures to prevent recurrence. The AFM acknowledges this (self-reporting and correction, cooperation with investigation) and has no reason to doubt it (cause of incorrect reports, subsequent measures taken). For the AFM, this is not grounds to refrain from imposing a fine, given the seriousness and culpability mentioned above, but it will be taken into account when determining the fine amount. Conclusion The above makes the imposition of a fine overall a 'suitable, necessary and proportionate'2 sanction. The AFM chooses to impose a single fine for both infringements, given the strong interconnection between both norms and between the behaviours/omissions that constitute the infringements in this case. 2 See for these criteria e.g. CBb 30 June 2025, ECLI:NL:CBB:2025:353, para. 8.2.

Date: 20 April 2026 Reference: […] Page: 3 of 6 3 5 Decision 5.1 Decision to impose a fine Based on the foregoing, the AFM has decided to impose an administrative fine on Arrowstreet for repeated infringement of Article 5(1) and Article 6(1) of the SSR, in the period from 22 July 2020 to 21 November 2024, as further specified in the table in Chapter 3 of this decision. 3, 4 5.2 Amount of the fine The AFM sets the amount of the fine at €297,000, following a simplified settlement. The AFM explains this as follows.5 Legal system: base amount of €500,000 A base amount of €500,000 applies to each of the two infringements.6 Since the AFM opts for a single fine, this base amount applies only once. Seriousness/duration of the infringements and degree of culpability The AFM may reduce or increase the base amount by up to 50% if the seriousness and/or duration of the infringement justifies it. Additionally, the AFM may reduce or increase the base amount by up to 50% if the degree of culpability justifies it. In this case, the AFM keeps the base amount unchanged; the seriousness, duration, and degree of culpability described in Chapter 3 do not warrant an increase or a reduction. Size of Arrowstreet When determining the fine amount, the AFM takes into account the size of the fined company.7 Arrowstreet falls into the 100% category of the size table in the AFM Fine Policy, so the fine amount remains unchanged. Proportionality test/proportionality As indicated in Chapter 4 (appropriateness), Arrowstreet's conduct in this case is grounds for a reduction of the base amount of €500,000. Briefly, Arrowstreet self-reported the infringements to the AFM and promptly corrected them, fully cooperated with the AFM's investigation, and took – apparently adequate – measures to prevent recurrence. By doing so, Arrowstreet acted proactively and did everything reasonably expected of it. The AFM sees grounds here for a 30% reduction of the base amount, to €350,000.8 5.3 Fine reduction due to simplified settlement As noted above, the AFM and Arrowstreet have agreed to a simplified settlement of the fine case. In this case, this means that: • Arrowstreet acknowledges the shortcomings established by the AFM; • the AFM imposes an administrative fine on Arrowstreet in an abbreviated fine decision; • the AFM applies a 15% reduction to the fine amount; and • Arrowstreet accepts this fine from the AFM and waives objection and appeal against both the fine itself and the publication of the fine decision. Concretely, this means the fine is reduced from €350,000 to €297,000.9 5.4 Payment of the fine The fine must be paid within six weeks of the publication of this decision10 to bank account [account number] in the name of AFM in Amsterdam, quoting invoice number [invoice number]. Arrowstreet will not receive a separate invoice for this amount. If paid after the six-week deadline, Arrowstreet is liable for statutory interest.11 Amsterdam, 20 April 2026 Autoriteit Financiële Markten [signed] [signed] Legal Officer Administrative Fines Fine Officer Any interested party may lodge an objection against this decision by submitting a written objection to the AFM within six weeks of its publication, addressed to Legal Affairs, Postbus 11723, 1001 GS Amsterdam. An objection may also be submitted by email (bezwarenbox@afm.nl). The AFM imposes additional requirements on this electronic submission, which are explained on its website (www.afm.nl/bezwaar). One of these requirements is that an objection cannot be sent to other AFM email addresses than the one mentioned here. The AFM will only process the objection on its merits if these requirements are met. 3 The AFM has the authority to impose a fine on the basis of Article 1:80 of the Financial Supervision Act (Wft) in conjunction with a) Article 5 and Annex 2 of the Decision on the implementation of EU regulations on financial markets, for infringements that began before 1 April 2024, and b) Article 3 and Annex 3 of the EU Regulations Wft Decision, for infringements that began on or after 1 April 2024. 4 The AFM points out that the infringements for which this fine has been imposed count as a supervisory antecedent for all (co-)policy makers and the members of the supervisory body during the infringement period. 5 The AFM follows the step-by-step plan as included in the AFM Fine Policy 2021 (the Fine Policy). See: Administrative fine and publication (Amount of the fine). 6 The base amount has been established on the basis of Article 1:81, first and second paragraphs, of the Wft in conjunction with the provisions mentioned in footnote 3 from the two decisions. 7 Step 4 of the Fine Policy.

Date: 20 April 2026 Reference: […] Page: 4 of 6 4 8 See in this regard also the Explanatory Memorandum on the Fine Policy (p. 3), which states that reductions of more than 30% on the basis of the 'conduct of the offender' are exceptional. 9 Amount after rounding in accordance with Article 3.2 (final) of the Fine Policy. 10 Article 4:87, first paragraph, and Articles 3:40 and 3:41 of the General Administrative Law Act (Awb). 11 Article 1:85 Wft.