SRD2 – UK Transposition At A Glance

The final deadline for implementing the Shareholder Rights Directive is rapidly approaching. Here are the key milestones for issuers, intermediaries, asset managers and proxy advisors.

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RequirementApplies ToDeadlineRegulation/RuleObservations
Vote ConfirmationIssuers & intermediariesSeptember 2020EU Commission Implementing Regulation 2018/1212The EU Implementation Regulation provides a template for submitting and responding to vote confirmation requests. Confirmation is two stage: Receipt of votes – Immediate ConfirmationRecording and counting – within 15 days of the request or the date of the meeting, whichever is later.
Shareholder IdentificationIssuers & IntermediariesSeptember 2020EU Commission Implementing Regulation 2018/1212The UK Companies Act already allows issuers to request the identity of any shareholder with share or “any interest” in the company. The Implementing Regulation provides standards and templates for requesting and transmitting information. Specifically, shareholder ID must be provided by the intermediary on the business day following the record date or the receipt of the request, whichever is later.
Voting Data TransmissionIssuers & IntermediariesSeptember 2020EU Commission Implementing Regulation 2018/1212The Implementing Regulation provides templates for how meeting related information should be organized and transmitted (“without delay”). Issues covered by the template include: the notice of meeting, agenda items, deadlines, voting rights, shareholder participation in the general meeting and shareholder voting instructions.
Proxy Advisor Code of ConductProxy Advisors21 June 2019Part 2, The Proxy Advisors’ (Share-holders’ Rights) Regulations 2019Proxy Advisors are required to register with the FCA as a proxy advisor by April 2020. Further, they are required to disclose: Which code of conduct (“the Code”) they apply; and if they depart from any of the recommendations contained in the code, The reasons for departure from the code recommendations and explanation of any alternative measures.
Remuneration Reporting & Shareholder Vote on RemunerationIssuersN/AN/AMinor changes to remuneration reporting covering service contract lengths and average change in employee pay will be updated. When a policy does not receive shareholder approval, a new policy must be submitted for approval at the next AGM.
Related Party TransactionsIssuers10 June 2019DTR 7.3New standards for board approval and public announcement of material related party transactions for both premium and standard listings. The materiality threshold of 5% is tested against assets, profits, market capitalization or gross capital. Shareholder approval and a third-party report of material transactions is only required for premium listed securities.

SRD 2 for Asset Managers

RequirementDeadlineRegulation/Rule
Disclose an engagement policy10 June 2019Section 2.2B 5-6 FCA Conduct of Sourcebook of the Business
Disclose engagement and voting behaviourFirst full annual reporting period after 10 June 2019Section 2.2B.7 of the FCA Conduct of Business Sourcebook
Disclose investment strategy and implementationFirst full annual reporting period after 10 June 2019Section 2.2B.9 of the FCA Conduct of Business Sourcebook
Last Updated: 29 June 2020