From 3 September 2020, the provisions under SRD II which focus on encouraging long-term shareholder engagement and enhancing transparency between companies and investors apply, along with Implementing Regulation 2018 / 1212. Intermediaries, and those with responsibility for implementing regulatory change within institutions, will need to be thinking about how the requirements as regards shareholder identification, the transmission of information and the facilitation of the exercise of shareholders rights apply to their business.

There are several complexities to work through relating to:

  • Data transfer.
  • Technology solutions to aid prompt transfer.
  • Application to complex chains of intermediaries.
  • Different implementation of some of the key issues by Member States.

Another complexity is that the requirements around shareholder identification also apply to third-country intermediaries that provide services to shareholders or other intermediaries with respect to shares of companies which have their registered office in a Member State and the shares of which are admitted to trading on a regulated market situated or operating within a Member State.

In the past few months, several firms and trade associations have publically indicated their concerns about firms’ abilities to meet the 3 September deadline. These concerns have been compounded by the wide-spread disruption caused by the COVID-19 pandemic, which is making it extremely challenging for firms to meet the implementation deadline.

We are currently helping a number of clients to work through these challenges, and the associated risks, in anticipation of the 3 September implementation date.