The Grand Ducal Law of 1 August 2019, transposing the Directive (EU) 2017/828 on Shareholders' Rights, is adopted

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The Grand Ducal Law of 1 August 2019, transposing the Directive (EU) 2017/828 on Shareholders' Rights, is adopted

21 August 2019

Regulatory News Alert

The Grand Ducal Law of 1 August 2019 amends the Law of 24 May 2011 on the exercise of certain shareholder rights. This law transposes, for Luxembourg, the Directive (EU) 2017/828 (hereafter the Shareholders' Rights Directive II or SRD II).

The SRD II includes various amendments to the SRD I in order to enhance and harmonize the corporate governance of EU listed companies. It particularly focuses on encouraging long-term engagement of shareholders and on increasing transparency throughout the investment process.

For an overview of the SRD II provisions, you may consult our previous article on the topic. The below highlights the key specificities of the Luxembourg transposition.


Extension of the scope of application

While the Law of 24 May 2011 used to apply to companies governed by Luxembourg law whose shares are admitted to trading on a regulated market, its amended version also applies to intermediaries of the investment process, such as institutional investors, asset managers, and proxy advisors.

The Law will apply to listed shares of Luxembourg incorporated companies, with or without voting rights and beneficiary parts with voting rights.

AIFs and cooperatives are excluded from the application of Luxembourg law. UCITS are excluded from most of the obligations of the Law, except the requirements on transparency regarding the publication of investment and engagement policies.


Definition of the shareholder

The shareholder is defined as any natural or legal persons owning shares, from the first share owned. Hence, the person recorded as the owner of the shares in the shareholders register is the deemed owner of the shares.


Intermediaries can charge fees for the transmission of information

The transmission of information, on shareholders, on general meetings, and on the voting process, alongside the chain of stakeholders of the investment process will imply costs of the obliged entities. Conscious of this fact, the Luxembourg legislator allows the intermediaries to charge fees for the services provided for under Chapter II on identification of shareholders, transmission of information, and facilitation of exercise of shareholder rights.


Useful links

Access the document.

PDF - 126kb

Contacts

Pascal Eber
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Human Capital
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Pascal Martino
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Simon Ramos
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Leader
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Benoit Sauvage
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Astrid Brandy
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