Shareholder Rights Directive: Parliament Resolution at First Reading to Adopt Directive

On 14 March 2017, the European Parliament resolved to adopt the Commission's proposal to amend the Shareholder Rights Directive. The amendments approved by Parliament include:

• The requirement that institutional investors must publicly disclose how the main elements of their investment strategy are consistent with their long-term liabilities and, where an asset manager invests on behalf of an institutional investor, how the arrangement between them incentivises the asset manager to align its investment strategy with the institutional investor's long-term liabilities and medium- to long-term financial and nonfinancial performance;
• The ability of member states to allow companies to temporarily derogate from their remuneration policy in exceptional circumstances—i.e. where necessary to serve the long-term interests of the company as a whole or to ensure its viability; and
• Amendments to the provisions in respect of related party transactions, allowing member states to exclude transactions: (i) entered into in the ordinary course of business and concluded on normal market terms; (ii) entered into between the company and its subsidiaries (but not joint ventures); (iii) for which national law requires approval by the general meeting; (iv) regarding remuneration of directors; (v) entered into by credit institutions on the basis of measures adopted by the competent authority in charge of prudential supervision; and (vi) offered to all shareholders on the same terms.

Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our "Contact Us" form, which can be found on our website at www.jonesday.com. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.