Shareholders Rights Directive II — Portugal
The SRD II, Directive 2017/828 of May 17, 2017, amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement, has been transposed to the Portuguese legal framework.
The transposition law (Law 50/2020 of August 25) entered into force on August 26, 2020.
About the SRD II
The SRD is a European Union Directive to strengthen the position of shareholders and ensure that decisions are made for a company’s long-term stability. It impacts corporate governance in companies with registered offices in EU Member States and whose securities are traded on EU’s regulated markets.
It creates tools to encourage long-term shareholder engagement by setting requirements applicable to:
- Identification of shareholders
- Transmission of information between Issuers, Intermediaries, and Shareholders
- Facilitation of the exercise of shareholders rights
- Transparency of costs
- Public disclosure of information by institutional investors, asset managers, life insurers, and proxy advisors
- Remuneration of directors and related party transactions
The transposition introduced amendments to:
- Portuguese Securities Code;
- Portuguese Collective Investment Structures Code; and
- Portuguese Credit Institutions and Financial Enterprises General Regime.
The new regulation applies to trade on regulated markets, institutional investors, financial intermediaries, portfolio managers, and proxy advisors.
New rules governing the disclosure and approval of remuneration policies are in force. Other new regulations and duties are in place regarding internal procedures of approval and assessment of whether transactions with related parties are conducted within the scope of the company’s ordinary business course and within market conditions.
New rules are to be implemented in general meetings of listed companies, thus facilitating information delivery, voting rights, and electronic voting. Other amendments focus on shareholder identification rules, transparency of investment strategies by portfolio managers and advisors, engagement policies, and institutional investors and financial intermediaries’ investment strategies.
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