In December 2016, after several months of discussion between the institutions, the COREPER (representatives of the Member States) has agreed on the revision of this Directive. This amendment aims at encouraging transparent and active engagement by shareholders of listed companies. The revision provides for new requirements such as the oversight of directors’ remuneration, the identification of shareholders, the facilitation of the exercise of shareholder’s rights and transparency for institutional investors, asset managers and proxy advisors.
Despite the involvement of the Financial Reporting Council (the UK’s independent regulator) in the directive’s consultation process, the directive might not be enforced (or only partially) in the UK. One of the reasons given is that those rules could be too onerous.
The Financial Inclusion Center has suggested that asset managers have used the Brexit uncertainty to resist this new directive. It appears that it is a matter of timing: if the Directive is not passed officially before the UK triggers article 50 of the TFEU, then the UK would not have to apply this directive.
However, the Financial Reporting Council and the UK Government assure that they will try to incorporate as many elements of the new Directive as possible in the UK legislation once the revision is passed by the European Parliament in early 2017.
Read the Investment and Pensions Europe article here