The European Council's formally adopted on July 11, 2007 the Directive on the exercise of shareholders' rights. This key measure will enable shareholders of listed companies throughout the European Union to exercise their rights and have their say.

The Directive introduces minimum standards to ensure that shareholders of companies whose shares are traded on a regulated market have a timely access to the relevant information ahead of the general meeting (GM) and simple means to vote at a distance. It also abolishes share blocking and introduces minimum standards for the rights to ask questions, put items on the GM agenda and table resolutions. The Directive allows Member States to take additional measures to facilitate further the exercise of the rights referred to in the Directive.

The Directive features the following key provisions:

• Minimum notice period of 21 days for most GMs, which can be reduced to 14 days where shareholders can vote by electronic means and the general meeting agrees to the shortened convocation period;

• Internet publication of the convocation and of the documents to be submitted to the GM at least 21 days before the GM;

• Abolition of share blocking and introduction of a record date in all Member States which may not be more than 30 days before the GM;

• Abolition of obstacles on electronic participation to the GM, including electronic voting;

• Right to ask questions and obligation on the part of the company to answer questions;

• Abolition of existing constraints on the eligibility of people to act as proxy holder and of excessive formal requirements for the appointment of the proxy holder;

• Disclosure of the voting results on the issuer's internet site.

Member States have until July 2009 to implement the Directive 2007/36/EC in their national laws.

The Commission proposed the Directive in January 2006. The Council of Ministers and the European Parliament reached agreement on the content of the future Directive in a single reading in February 2007. Eurosif supported the directive proposal: Eurosif met with Commission representatives and took part in two consultations during the inception of this directive proposal.

For more information, you may download:

Directive 2007/36/EC (PDF 73 Ko)

Eurosif’s response to the 2nd consultation dated July 2005 (PDF 37 Ko)

Current State: Third Consultation

While a directive was formally adopted, the Commission might adopt a separate non-binding instrument on shareholders’ rights supplementing this directive, particularly regarding the role of intermediaries in the voting process.

Eurosif responded to the third consultation paper “Fostering an appropriate regime for shareholders’ rights” in July 2007. In its response Eurosif addressed the following points:

• Language of meeting documents

• Chain of intermediaries

• Timeliness of information flows

For more information, you may download:

EC Third Consultation Paper (PDF 38 ko)

Eurosif’s response to the EC Third Consultation (PDF 73 Ko)

Access the Commission website page on this topic

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(Last Updated: August 2007)