On 9th July 2020, the UK Government published the Companies (Shareholders’ Rights to Voting Confirmations) Regulations 2020 (the “Regulations”) , which amends certain provisions of the EU Shareholder Rights Directive 2007 (as amended) , and in particular certain provisions of Article 3c (facilitation of the exercise of shareholder rights). The Regulations came into force on 3 September 2020.
What does this mean for UK companies?
Firstly, the Regulations only apply to UK companies whose shares carry voting rights and are admitted to trading on a regulated market within the EEA (i.e. “traded companies” as defined under section 360C of the Act). As AIM is not a regulated market, this will not include a company with shares traded on AIM, however, it will apply to UK listed companies and companies trading on the High Growth segment of the Main Market.
As a result of the Regulations, the Companies Act 2006 (the “Act”) has been amended to include the following additional provisions:
Where a vote is cast on a poll by electronic means on or after 3 September 2020, there is now an obligation on traded companies to provide a confirmation of receipt of the vote to the member, proxy or representative (as the case may be) (section 360AA); and
Shareholders of traded companies now have a right to request information from the company after a general meeting held on or after 3 September 2020 to enable them to determine that their vote has been validly recorded and counted, so long as the shareholder makes the information request no later than 30 days from the date of the relevant general meeting and the shareholder does not have any other reasonable means by which to determine that his vote has been validly recorded and courted by the company (section 360BA).
Under new section 360BA, the company is obligated to provide the relevant information to the shareholder as soon as reasonable practicable and in any event within 15 days of the result of the poll or the information request (whichever is later).
Traded companies need to ensure that they are complying with these obligations, given the Regulations are now in force. Companies should liaise with their registrars so as to ensure that it can enable electronic voting ahead of a general meeting and comply with the obligations under the Regulations. Under the Act, companies may impose whatever requirements are necessary to ensure the identification of those taking part by electronic means in a general meeting of a company.
If you have shares in a traded company, or sit on the board of directors of a traded company, and would like further information on this, please contact Greg Stonefield or Jenny Willcock for further information.
The Shareholder Rights Directive 2007/36/EC, amended by the Directive 2017/828/EU establishes requirements in relation to the exercise of certain shareholder rights attached to EU listed companies. It also establishes specific requirements in order to encourage shareholder engagement, in particular in the long term.