New Transparency Requirements for Listed Companies implemented in the EU

The EU rules require issuers of securities on regulated markets must disclose certain key information to ensure transparency for investors.

The Regulation (EU) 2018/1212 (the “Regulation”) implements these new rules embodied in the Directive 2007/36/EC regarding shareholder identification, the transmission of information and the facilitation of the exercise of shareholders’ rights (the “SRD”). The Implementing Regulation entered into force last September 24, 2018 and shall apply as of September 3, 2020.

According to the SRD and its Amendment, the Regulation is intended to (i) grant listed companies the right to identify their shareholders by requiring intermediaries to cooperate in such process; (ii) improve shareholders’ notification measures, and (iii) require intermediaries to facilitate the exercise of shareholders rights, including the right to attend to and vote in general shareholders’ meetings, as well as financial rights, such as distribution to profits or corporate events initiated by the issuer (or by third parties). Specifically, the Regulation provides certain formats for such communications, efficient and reliable information collection, processing and transmission, including potential interconnection between intermediaries, the issuer and its shareholders.

The Regulation specifies standardized formats and minimum content requirements for an array documents, such as: (i) requests to disclose information about a shareholder’s identity and responses to such requests; (ii) notices of general meetings; (iii) confirmations of entitlement to exercise shareholders’ rights with regard to general meetings; (iv) certain format as to the confirmation, as well as recording and counting of votes at such meetings; (iv) minimum types of information to be included in such communications and (vi) the transmission of specific information in connection with certain corporate events other than general meetings of shareholders.

The use of these formats and content requirements is intended to uniform implementation of such provisions across EU member states. The Regulation also sets deadlines to be complied by issuers and intermediaries in corporate events and in shareholder identification processes.

By AEM Carnelutti, a member of the EACCNY