On 10 July 2019 the Luxembourg Parliament (Chambre des Députés) adopted the final text of the draft law No. 7402 (the New Shareholders Rights Law for the purposes of implementing Directive (EU) 2017/828 amending Directive 2007/36/EC as regards the encouragement of long term shareholder participation (the Shareholders Rights Directive II). The New Shareholders’ Rights Law will amend the law of 24 May 2011 on the exercise of certain shareholders' rights at general meetings of listed companies (the 2001 Law).
The 2011 Law related to the protection of the exercise of certain rights of shareholders in listed companies in connection with general meetings; however, the New Shareholders Rights Law introduces a significant conceptual change by imposing obligations on asset owners and asset managers with respect to their investments in listed Luxembourg companies, the purpose of which is to increase transparency as well as the quality of shareholder’s engagement. Consequently, such enhancement of shareholders rights triggers major regulatory changes for asset owners and asset managers.
Intermediaries maintaining securities accounts on behalf of shareholders are equally impacted by the New Shareholders Rights Law; they will indeed be involved in the transmission of information, along the chain of holding, between the issuer and the shareholder to facilitate the exercise of shareholders rights.
Additional information on the new rights and duties will be detailed in an ad hoc article to be followed soon.