On 20 March 2026, Germany’s Federal Financial Supervisory Authority (BaFin) announced with immediate effect that it will change how voting rights are attributed under the German Securities Trading Act (Wertpapierhandelsgesetz, WpHG). The move follows a February judgment of the CJEU, which found that Germany’s expansive approach to shareholder coordination went beyond what the EU Transparency Directive permits.

The shift matters because BaFin has abandoned its broad reading of coordination and reset attribution to the EU baseline. Voting rights will now be aggregated only where investors are bound by a long‑term agreement to pursue a common policy toward an issuer’s management, sharply reducing disclosure risk for collaborative engagement.

What Has Changed

The trigger was a judgment of the CJEU on 12 February 2026 in Case C‑864/24. The Court held that Section 34(2) of the WpHG exceeded what the Transparency Directive allows.

Under German law, voting rights could previously be attributed not only where shareholders had an agreement, but also where they coordinated “in another manner”, including informal or factual cooperation. The Court found that such an expanded attribution regime is permissible under EU law only where it is directly linked to takeover bids, mergers, or other transactions affecting ownership or control.

BaFin responded with a supervisory notice on 20 March announcing immediate changes to its administrative practice. Until the legislator amends the statute, BaFin will interpret “acting in concert” under Section 34(2) WpHG in line with the Transparency Directive and attribute voting rights only where there is a binding, long‑term agreement to pursue a common policy toward an issuer’s management. Certain additional attribution grounds under Section 34(1) WpHG that have no equivalent in EU law will no longer be applied.

Why This Matters for Investors

This is a substantive recalibration rather than a technical clean‑up. Under the previous approach, investors faced the risk that informal coordination could trigger aggregation of voting rights and push them over disclosure thresholds without clear intent or awareness.

Under the revised standard, attribution turns on the existence of a binding agreement aimed at sustained influence over management. Ad hoc coordination, shared engagement priorities, or informal alignment do not meet that threshold by default. For investors managing disclosure risk across multiple jurisdictions, the change removes a major source of uncertainty and aligns Germany with the prevailing EU approach.

Implications for Stewardship Collaboration

The change is particularly relevant for sustainability-focused collaborative engagement. Institutional investors frequently coordinate to engage companies on climate strategy, supplychain standards, or governance practices, often through joint letters or shared dialogue.

BaFin and the German courts have long acknowledged that ESG discussions do not in themselves constitute acting in concert, provided they do not involve agreements on voting strategies or sustained influence over corporate direction. However, the breadth of the former “coordination in another manner” concept meant that uncertainty persisted in practice.

By narrowing attribution to formal, long-term agreements, BaFin has materially reduced that uncertainty. Participation in ESG coalitions or issue-specific engagement is now less likely to trigger voting rights aggregation under the WpHG. The risk has not disappeared entirely, but the boundary is clearer and more predictable.

What Has Not Changed

The ruling does not affect takeover law. BaFin has confirmed that it will continue to apply Section 30 of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs‑ und Übernahmegesetz, WpÜG) unchanged.

As a result, the acting in concert concept remains broad in takeover proceedings, particularly where coordinated behaviour could lead to control. Investors still need to monitor aggregation carefully around the 30 percent threshold that can trigger a mandatory takeover bid. The CJEU ruling narrows transparency obligations, not control rules.

What to Watch Next

In the short term, BaFin’s move provides welcome clarity for investors navigating collaborative strategies in Germany and illustrates how quickly supervisory practice can shift following intervention by the CJEU.

In the medium term, legislative amendments will be needed to formally align Sections 34(1) and 34(2) WpHG with EU law. Until then, investors must rely on BaFin’s updated practice rather than the statutory wording alone. For institutional investors, this is an opportune moment to revisit internal policies on collaboration and information sharing.