EU introduces minimum requirements to facilitate exercise of shareholder rights

EU introduces minimum requirements to facilitate exercise of shareholder rights

The European Commission has implemented a Regulation and Annex specifying minimum requirements regarding shareholder identification, the transmission of information and the facilitation of the exercise of shareholders’ rights under the Shareholder Rights Directive (2007/36/EC) (SRD).

Directive (EU) 2017/828 amended the SRD with regard to the encouragement of long-term shareholder engagement. It gave the Commission the power to adopt implementing acts that specify minimum requirements in relation to shareholder identification, the transmission of information and the facilitation of the exercise of shareholder rights by 10 September 2018. An April 2018 public consultation from the Commission included a draft regulation and annex implementing these minimum requirements, which has now been adopted by the Commission.

Regulation (EU) 2018/1212 specifies standardised formats and minimum content requirements for a number of documents including:

• requests to disclose information about a shareholder’s identity and responses to such a request

• notices of general meetings

• confirmations of entitlement to exercise shareholders’ rights at a general meeting and notices of participation by a shareholder at a general meeting

• the format of the confirmation of the receipt and recording and counting of votes at a general meeting

• the transmission of information specific to corporate events other than general meetings of shareholders

The use of standardised formats and content requirements is intended to prevent diverging implementation of the provisions of the SRD, which could result in the adoption of incompatible national standards across Member States and to enable efficient and reliable processing of information between intermediaries, issuers and shareholders.

The Regulation also sets out deadlines to be complied with by issuers and intermediaries in corporate events and in shareholder identification processes, as well as minimum security requirements.

The Regulation enters into force on 24 September 2018 and shall apply from 3 September 2020. The Regulation is binding and directly applicable in all Member States.

Source: Press release: Commission Implementing Regulation (EU) 2018/1212

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