In May 2017, the European Parliament and the Council approved Directive (EU) 2017/828 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement (the Shareholder Rights Directive II or SRD II). The due date of 10 June 2019 for the transposition of this new Directive into national law is approaching fast. So far, the Belgian legislator has not yet published any draft law. It is not certain when this Directive will be transposed into Belgian law. Financial players should, however, be aware that the transposition of this Directive will impose important new obligations with respect to their service offering.
In 2007, Directive 2007/36/EC of the European Parliament and the Council (SRD I) introduced a higher level of protection rights for shareholders in listed companies across the EU. SRD I focussed on corporate law aspects. It includes requirements on the timely access to information on general shareholder meetings and on the facilitation of the exercise of voting rights by correspondence and by proxy.
SRD II aims to strengthen the position and involvement of shareholders and to ensure that decisions are made for the long-term stability of a listed company. To this end:
- listed companies are given rights allowing the identification of existing shareholders (this should facilitate direct company/shareholder communication);
- the transmission of information to shareholders is further facilitated by introducing more standardised formats of communication.
However, SRD II reaches beyond listed companies and investors:
- new shareholder information obligations are imposed on financial intermediaries;
- new transparency obligations on shareholder involvement are imposed on several financial service providers.
SRD II also introduces obligations for a new category of service providers, “proxy advisors”. These are legal persons that analyse corporate disclosures on a professional basis to provide research, advice or recommendations in relation to the exercise of voting rights.
The new obligations introduced under SRD II will have an impact on institutional investors and financial intermediaries, depending on the services they offer to investors.
More information on the new obligations is available here.
For more information, do not hesitate to contact Audrey Zegers, Senior manager, PwC and Olivier Hermand, Partner and FS Leader, PwC.