On 28 July 2023, the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA) published a report on the implementation of the Shareholder Rights Directive 2 (SRD 2) provisions on proxy advisors and the investment chain.

In this report, the EBA analyses the implementation of certain provisions in the SRD2, in relation to the charges applied by intermediaries and the practices of third country intermediaries.

The report highlights the following:

  • The level of disclosure and comparability of costs charged by intermediaries remain limited across the EU, mainly due to a lack of harmonisation of the types of fees or services and of detailed disclosure requirements. The EBA notes that on these aspects there is room for improvement to increase competition among players and reduce the negative impact of costs on investors’ engagement.
  • Differences in the practices followed by third-country intermediaries are identified compared to European intermediaries, mainly for small local third-country intermediaries, which may also be due to the lack of standardised processes among European Member States. The EBA notes that a higher standardisation would benefit non-EU and EU entities alike.

The report will serve as basis for the upcoming work of the European Commission in assessing the implementation and the potential review process of the SRD 2.