The case

Swiss banks currently inform their clients about the “Revised Shareholder Guidelines”. The reason for this is the “Directive (EU) 2017/828” of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement. For more see link.

With the “Shareholder Rights Directive II” (EU) 2017/828 (“Directive”), the European Union (“EU”) has adopted a directive that is intended to promote the participation of shareholders in listed companies located in the EU. This is to be achieved through the following three measures (shortened and summarized):
• Identification of shareholders: According to Art. 3a of the Directive, listed companies in the EU have the right to identify their shareholders. Thus, the company may require the financial intermediary who has the necessary information to provide certain information, in particular the identity of the shareholder.
• Transmission of information: Financial intermediaries must immediately pass on to the shareholder any information necessary for the exercise of the shareholder’s rights (e.g. convening or cancellation of a General Meeting of Shareholders (AGM).
• Facilitating the exercise of shareholders’ rights: Financial intermediaries must facilitate the exercise of rights by the shareholder, in particular the right to participate and vote in the AGM. To this end, the financial intermediary must take precautions to ensure that the shareholder, a third party designated by the shareholder or the financial intermediary can exercise the rights attached to the shares with the express permission of the shareholder and in accordance with the shareholder’s instructions.

Even though European law does not apply in Switzerland in principle, financial intermediaries domiciled in Switzerland must comply with the obligations under the Directive if they provide services to shareholders of a company whose shares are listed on the stock exchange of an EU member state in connection with shares of such companies.

Source: eur-lex.europe.eu and Swiss banks

The commentary

 The Directive itself has no legal effects. However, it obliges the EU member states to transpose the directive into national law. This should in principle be done by 21 June 2019. Since many states are behind schedule, the transposition laws will come into force at different times. For example, the transposition law has already come into force in Germany, with a transitional period until 3 September 2020 for the notification and information obligations.

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