On 14 March 2017 the European Parliament adopted the text of a proposed directive to amend the Shareholder Rights Directive (2007/36/EC). This was adopted by the Council of the European Union (with only some very minor amendments) on 3 April 2017.
The key elements of the amending Directive are that:
- Companies will have greater disclosure obligations with respect to their remuneration policy, and shareholders will have an advisory vote on the remuneration policy.
- Shareholders will have increased voting power over related-party transactions which represent more than 5% of a company's assets or which could have significant impact on profits or turnover. Related-party transactions which represent more than 1% of a company's assets must also be publically announced together with the publication of an independent third-party report.
- Proxy advisors will be required to disclose certain information regarding the preparation of their voting recommendations and any conflict of interests that might influence their voting recommendations.
- Institutional investors and asset managers must disclose, amongst other things, their voting and engagement policies.
- Companies will be able to require greater transparency in the identification of shareholders and in transmitting certain information by intermediaries to the ultimate beneficial shareholders.
The text of the Directive must be transposed into national legislation within 18 months after the Directive enters into force, which will take place after the text has been published in the Official Journal.
The full text of the proposal is available at:
http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52014PC0213
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.