Ireland: Maples and Calder Capital Markets Update

Last Updated: 4 May 2017
Article by Edward Miller, Patrick Quinlan and Mark Roberts

This update summarises recent developments regarding the legal and regulatory rules which impact on Irish public company equity securities issuers, their investors and professional advisers and service providers. 

New EU Shareholder Rights Directive

A revised Shareholder Rights Directive has recently been adopted by the European Council. The revised Directive is intended to enhance shareholder engagement in listed companies and to increase transparency and, in particular, to address concerns that have been raised about the short term nature of the investment strategies of institutional investors and asset managers. 

Like the existing Shareholder Rights Directive 2007/36/EC, the revised Directive will apply to companies that have a registered office in an EU Member State and whose shares are admitted to trading on a regulated market situated or operating within a Member State.

It will enter into force on the twentieth day following its publication in the Official Journal of the EU. Member States will then have two years to incorporate the new provisions into domestic law. The main changes being introduced are as follows:

Additional transparency requirements

Institutional investors and asset managers will be required to either:

(a) develop and publicly disclose an engagement policy that describes how they integrate shareholder engagement in their investment strategy and publicly disclose annually how the policy has been implemented (including details of how they have cast votes in respect of significant shareholdings); or

(b) publicly disclose a clear and reasoned explanation why they have chosen not to comply with the above requirements.

Institutional investors will be required to publicly disclose how the main elements of their equity investment strategy are consistent with the profile and duration of their liabilities and how they contribute to medium to long-term performance of their assets.

Where an asset manager invests on behalf of an institutional investor, the institutional investor will also be required to publicly disclose how the arrangement incentivises the asset manager to align its investment strategy with the long term liability profile of the institutional investor; how it incentivises the asset manager to make investment decisions based on medium to long term performance; how it monitors portfolio costs; and how long the arrangement lasts.

Asset managers will be obliged to report to institutional investors on how their investment strategy complies with the arrangements with the institutional investor and contributes to medium to long term performance.

Proxy advisors will be required to publicly disclose the code of conduct that they apply and report on the application of the code of conduct or provide an explanation of why they do not apply a code of conduct.

Proxy advisors will also be required to publicly disclose annually the methodologies, information sources and other key information that they use in the preparation of their advice and voting recommendations.

Intermediaries and cross border voting

A number of requirements will be imposed on intermediaries who provide share safekeeping, administration or account maintenance services. These include obligations to provide information on shareholder identity if requested by an issuer; to transmit issuer information and shareholder instructions without delay; and to facilitate the exercise of rights by shareholders. 

Intermediaries will also be required to publicly disclose any charges that may be levied for their services. Intermediary charges must also be non-discriminatory and proportionate in relation to the actual costs incurred in delivering services. 

Shareholders' vote on remuneration policy 

Issuers will be obliged to ensure that a directors' remuneration policy is drawn up and is put to a vote of the shareholders ("say on pay")

The policy must be submitted to a vote at general meeting on every material change and at least every four years.  It must be clear and describe the different components of fixed and variable remuneration which can be awarded to directors, including all bonuses and other benefits.

Member States can either provide that the vote is binding or advisory. 

If the vote is binding and the policy is not approved, the issuer will be obliged to continue to pay directors' remuneration in accordance with its existing practice. 

If the vote is advisory the issuer will be obliged to pay directors' remuneration only in accordance with the policy submitted to the vote and, if the policy is rejected, to submit a revised policy to a vote at the following general meeting. 

The policy and the results of the vote must be made public and issuers will also be obliged to draw up an annual remuneration report that must be submitted to an advisory vote at the company's annual general meeting.

Related party transactions

Companies will be obliged to publicly announce material transactions with related parties and EU Member States may provide that the announcement is accompanied by a report assessing whether or not the transaction is fair and reasonable. Where the related party is a director or shareholder, Member States must ensure that adequate protection is provided for non-related party shareholders regarding the approval process of the related party transaction.

New EU Prospectus Rules  

The European Parliament and Commission have recently agreed a compromise text for a new EU Prospectus Regulation to replace the existing Prospectus Directive regime which currently applies to issuers who offer securities to the public or who list securities on a regulated market in the EU.

The Prospectus Regulation will come into force once formally adopted by the European Council, which is expected this year. Once in force it will have direct effect in EU Member States although it is anticipated that there will be a two year period before it applies.

The [Prospectus Regulation will simplify the rules and administrative procedures for prospectus approval and make it cheaper and simpler for smaller businesses to access capital markets.

The following are among the main changes proposed:

(a) The requirement to produce a prospectus will not apply to issues of securities with a total value below €1,000,000 measured over a 12 month period.

(b) Member States will be entitled to exempt issuers from the prospectus requirements where the amount to be raised EU-wide by the securities issue is less than €8,000,000 in any 12 month period (the current threshold being €5,000,000). It is yet to be seen to what extent Irish government will avail of this exemption.

(c) There will be a carve out from the prospectus requirements for the admission of securities to trading on a regulated market where the same class of securities is already admitted to trading,  if the new securities represent, over a period of 12 months, less than 20% of the number of securities already admitted. 

(d) A shorter prospectus regime for secondary issuances by issuers already listed on a public market.

(e) A simpler 'growth' prospectus regime will be available for the  following issuers:

(i) companies which meet certain defined criteria for an SME;

(i) other issuers admitted to trading on an SME growth market (the regime for which is to be implemented in 2018) who have an average market capitalisation of less than €500,000,000 over the last three years; and

(ii) Issuers with less than 500 employees undertaking an unlisted issuance of less than €20,000,000.

(f) A fast-track regime for frequent issuers will be introduced, similar to the 'shelf registration' process for securities issuers in the US. This procedure will allow the issuer to file a universal registration document each financial year, which can then be used as a base for subsequent prospectuses. After the issuer has had the universal registration document approved by the appropriate regulator in its home member state for two consecutive years, it will be able to file subsequent universal registration documents without prior approval.

Takeover Panel Rule 13 Guidance

The Irish Takeover Panel (the "Panel") has issued guidance concerning the inclusion of conditions in an implementation agreement for an offer to acquire an Irish public limited company which is regulated by the Irish Takeover Rules.

It has become customary for the conduct of a recommended offer to be subject to an implementation agreement entered into by the bidder and the target company. It is also customary for the parties to include a condition to the offer that the implementation agreement has not been terminated. The effect of such a condition is to also make the offer conditional on the termination events specified in the implementation agreement not having occurred.

Rule 13 of the Irish Takeover Rules regulates when parties can invoke a condition to terminate an offer.

The guidance confirms that Rule 13 itself does not automatically prohibit the inclusion of a condition to the offer that the implementation agreement has not been terminated or a condition that requires compliance by the target with specified terms of the implementation agreement. This will only be prohibited if satisfaction of the condition depends solely on subjective judgments by the directors of the party for whose benefit the condition is expressed or is within the control of such party. The Panel, for purposes of clarity, would however also expect the relevant termination events to be expressly included as conditions of the offer.

However this does not guarantee that a party would be entitled to withdraw an offer in the event of a termination event in respect of an implementation agreement arising. The general provisions of Rule 13 continue to apply in such circumstances. A condition to an offer can only be invoked if both of the following conditions are met:

(a) the condition is of material significance to the bidder in the context of the offer (i.e. it would incur material adverse commercial consequences in the context of the offer if it were compelled by the Panel to continue with its offer); and

(b) The Panel is satisfied that in the prevailing circumstances it would be reasonable for the bidder to invoke the condition. The Panel's view is that in most circumstance a bidder who has met the 'material significance' test set out above will also meet this 'reasonableness' test.

Bidders should therefore be advised at the outset of an offer about the implications of Rule 13 and its impact on the ability of the bidder to invoke conditions (including those arising from the implementation agreement) to terminate the offer once a takeover bid is launched.

Further Information

Should you have any questions or would like to discuss the above, please contact your usual Maples and Calder contact.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions