Earlier this year the Commission published a proposal to amend the 2007 Shareholder Rights Directive (the Directive). Both the original Directive and its proposed replacement are first and foremost instruments of company law, with improved corporate governance as their underlying policy objective. However, the legislation has important implications – not all of them positive – for asset managers, custodians and other financial intermediaries holding dematerialized securities for themselves and their clients. Amidst the plethora of new financial regulation with which financial market participants are currently grappling, there is a danger that this Directive could slip under the radar. This briefing note provides an outline of the new legislation highlighting some key areas of concern.
We expect a final text of the Directive to be adopted some time in late 2015 or early 2016. The current draft envisages implementation by Member States within 18 months of the legislation's entry into force.