LEGAL BASIS

Shareholder Rights Directive II – Directive (EU) 2017/828 amending Directive 2007/36/EC

 

The SRD II (Shareholder Rights Directive II) grants stock-exchange listed companies (issuers) with domicile in the European Economic Area the right to identify their shareholders. Intermediaries are obligated to enable the issuer to identify the shareholders.

When was the SRD II implemented?

The EU issued the Shareholder Rights Directive II (SRD II) on 17 May 2017. The SRD II fundamentally amends and revises the existing EU Directive 2007/36/EC and introduces changes for shareholders of stock-exchange listed companies with registered office in the EEA.

The regulations on the identification of shareholders and for simplifying the exercise of shareholders’ rights are implemented in Germany by the Implementing Law for Directive 2007/36/EC (ARUG ll). The EU substantiated the SRD II further by the Implementing Regulation (EU) 2018/1212. The regulations on the identification of shareholders have been in effect since 3 September 2020.

What does the SRD II mean for financial intermediaries? Who is affected?

The SRD II contains regulations for financial intermediaries that are entrusted with the depositing/management of securities or the keeping of securities accounts in the name of the shareholder (or other intermediaries). Financial intermediaries must enable the identification of shareholders if the issuer maintains its registered office and license in the EEA and its shares are traded at a regulated market.

Which parties are affected by the SRD II?

  • Companies, which maintain their registered office in the EEA and whose shares are admitted to trading at a regulated market
  • Intermediaries within and outside of the EEA
  • Institutional investors and asset managers, who invest in corresponding securities

What are the objectives of the SRD II?

Its focus is not only information being given to shareholders in a more effective way when it comes to company news, but also and especially making the exercise of shareholders’ rights less complex even in cross-border scenarios.

Objectives at a glance:

  • Identification of shareholders (Know Your Shareholder)
  • Simplified transmission of information and simplified exercise of shareholders’ rights
  • More transparency on the part of institutional investors, asset managers and voting rights advisers
  • Simplifying the co-determination by shareholders
  • Publication of transactions with related parties

Which markets and products are affected by the SRD II?

The SRD II applies primarily to shares that are issued by companies with registered office in an EEA Member State, which are admitted to trading at a regulated market within the EEA. This also includes securities listed at multiple markets.

The Directive therefore has global effects on both intermediaries as well as shareholders, who hold the corresponding shares.

What information is contained in the response to a shareholder identification request pursuant to the SRD II?

  • Definitive identification of the shareholder
  • Names and, if applicable, first name of the shareholder
  • Complete address of the shareholder (including country code)
  • Email address of the shareholder (if available to the intermediary)
  • Type of participation
  • Number of shares the shareholder holds at the responding intermediary
  • Name and unique identifier of a third party appointed by the shareholder if applicable

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