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What is the Shareholders Rights Directive

In 2007, the European Parliament and the European Council adopted Directive (EU) 2007/36/EC, named the Shareholder Rights Directive (SRD), to ensure better protection of the exercise of shareholder rights in companies admitted to trading.

In 2017, Directive (EU) 2017/828 (SRD II), amended the SRD to encourage the long-term involvement of shareholders of companies admitted to trading in the EU. To achieve this long-term investment objective, SRD II describes new obligations for companies admitted to trading in the EU, intermediaries, institutional investors, asset managers and proxy voting consultants.

On September 3, 2018, the European Commission published the Implementing Regulation (EU) 2018/1212, to specify the minimum requirements for the transmission of information to and from shareholders (for example, transmission format and request format – including security and interoperability – and deadlines to be met).

The purpose of the regulation is to use a common information exchange format to allow efficient and reliable processing and interoperability between intermediaries, issuers and shareholders

The implementing regulation also provides the minimum information required for each information transmission format that must be implemented by September 3, 2020

SRD II establishes the requirements in relation to the information to be provided by the issuers to the intermediaries, specifically the Issuer CSD, and to be transmitted along the chain of intermediaries until the shareholders, namely with regard to the identification of the shareholders, the general meetings and  corporate events.

The Shareholders Rights Directive was transposed into the national legislation through Law No. 50/2020, of August 25, 2020

Scope

The Shareholders Rights Directive applies to:

  • Issuers with registered office in a Member State; and
  • Shares are admitted to trading on a regulated market located or operating in a Member State.

Main requirements

Information

The information to be provided by issuers and to be transmitted to shareholders along the chain of intermediaries must be made in an electronic format.

The information must be provided by the issuer in the language in which it publishes its financial information and also in a language customary in the sphere of international finance.

Shareholder identification

The request for disclosure of the shareholders identification must be transmitted without delay by the Issuer CSD and by the intermediaries to the next intermediary in the chain, and no later than by the close of the same business day as it received the information.

If the request is received after 4 pm on a business day, it must be sent without delay and, at the latest, by 10 am on the next business day.

The reply to the request for disclosure of the shareholders identification must be sent without delay and no later than during the business day immediately following the record date.

General meetings

The notification of General Meetings must be transmitted without delay by the Issuer CSD and by the intermediaries to the next intermediary in the chain, and no later than by the close of the same business day as it received the information.

If the request is received after 4 pm on a business day, it must be sent without delay and, at the latest, by 10 am on the next business day.

SRD II – Support Documentation

More about Shareholders Rights Directive