Shareholders
Companies Act
Distribution by a PLC
Restriction on distribution of assets
1082. (1) A PLC may only make a distribution at any time—
(a) if at that time the amount of its net assets is not less than the aggregate of the PLC’s called-up share capital and its undistributable reserves; and
(b) if, and to the extent that, the distribution does not reduce the amount of those assets to less than that aggregate.
(2) For the purposes of this section the undistributable reserves of a PLC are—
(a) the PLC’s undenominated capital;
(b) the amount by which the PLC’s accumulated, unrealised profits, so far as not previously utilised by any capitalisation, exceed its accumulated, unrealised losses, so far as not previously written off in a reduction or reorganisation of capital duly made; and
(c) any other reserve which the PLC is prohibited from distributing by any enactment, other than one contained in this Part, or by its constitution.
(3) Subsections (4) to (8) of section 117 shall apply for the purposes of this section as they apply for the purposes of that section.
(4) A PLC shall not include any uncalled share capital as an asset in any financial statement relevant for the purposes of this section.
Relevant financial statements in the case of distribution by PLC
1083. (1) In addition to its application for the purpose of determining whether a distribution may be made by a PLC without contravening section 117 , and the amount of any distribution which may be so made, section 121 shall apply for the purpose of determining whether a distribution may be made by a PLC without contravening section 1082 , and the amount of any distribution which may be so made.
(2) Accordingly section 1082 shall be treated as contravened in the case of a distribution unless the requirements of section 121 in relation to the financial statements mentioned therein are complied with in the case of that distribution.
(3) For the purposes of the application of section 121 , by virtue of subsection (1), to a distribution (and without prejudice to that section’s application otherwise to a distribution by a PLC)—
(a) there shall, in section 121 (2)(b), be substituted “if that distribution would be found to contravene section 1082 ” for “if that distribution would be found to contravene section 117 ”; and
(b) there shall, in section 121 (3)(a) and (c), be substituted “whether that distribution would be in contravention of section 1082 ” for “whether that distribution would be in contravention of section 117 ”.
(4) In addition to the foregoing provisions as regards section 121 ‘s application, subsections (5) to (8) contain provisions supplementing section 121 ‘s application in the case of a distribution by a PLC and that section shall have effect accordingly.
(5) The following requirements apply to interim financial statements, as referred to in section 121 , that are prepared for a proposed distribution by a PLC, that is to say:
(a) the financial statements shall have been properly prepared or have been so prepared subject only to matters which are not material for the purpose of determining, by reference to the relevant items as stated in those statements, whether that distribution would be in contravention of section 117 or 1082 , as the case may be;
(b) a copy of those financial statements shall have been delivered to the Registrar;
(c) if the financial statements are in a language other than the English or Irish language, a translation into English or Irish of the statements which has been certified in the prescribed manner to be a correct translation, shall also have been delivered to the Registrar.
(6) The following requirements apply to initial financial statements, as referred to in section 121 , that are prepared for a proposed distribution by a PLC, that is to say:
(a) the financial statements shall have been properly prepared or have been so prepared subject only to matters which are not material for the purpose of determining, by reference to the relevant items as stated in those statements, whether that distribution would be in contravention of section 117 or 1082 , as the case may be;
(b) the statutory auditors of the PLC shall have made a report stating whether, in their opinion, the financial statements have been properly prepared;
(c) if, by virtue of anything referred to in that report, the report is not an unqualified report, the statutory auditors shall also have stated in writing whether, in their opinion, that thing is material for the purpose of determining, by reference to the relevant items as stated in those financial statements, whether that distribution would be in contravention of section 117 or 1082 , as the case may be;
(d) a copy of those financial statements, of the report made under paragraph (b) and of any such statement shall have been delivered to the Registrar; and
(e) if the financial statements are, or that report or statement is, in a language other than the English or Irish language, a translation into English or Irish of the financial statements, the report or statement, as the case may be, which has been certified in the prescribed manner to be a correct translation, shall also have been delivered to the Registrar.
(7) For the purposes of this section, section 121 (6) shall apply as if “Where subsection (3)(a) or section 1083 (5)(a) or 1083 (6)(a) applies to the relevant financial statements” were substituted for “Where subsection (3)(a) applies to the relevant entity financial statements”.
(8) The reference in the definition of “properly prepared” in section 121 (7) to financial statements includes a reference to interim or initial financial statements referred to in subsection (5) or (6) and, for the purpose of that definition as it relates to either such type of statement, section 290 and section 291 or 292 as appropriate, and, where applicable, Schedule 3 shall be deemed to have effect in relation to interim and initial financial statements with such modifications as are necessary by reason of the fact that the financial statements are prepared otherwise than in respect of a financial year.
Limitation on reduction by a PLC of its company capital
1084. A PLC may not reduce its company capital below the authorised minimum and section 84 shall be read accordingly.
Not applicable to Credit Institutions
1114. Part 6 shall not apply to a PLC that is a credit institution or an insurance undertaking—
(a) to the extent provided by regulations made under section 3 of the European Communities Act 1972 to give effect to Community acts on accounts of credit institutions and insurance undertakings, respectively; or
(b) to the extent provided by any other enactment.
Requirement for corporate governance statement and modification of certain provisions of Parts 5 and 6 as they apply to PLCs
1115. Chapter 3 of Part 23 has effect in relation to, amongst other companies, a PLC that has shares or debentures admitted to trading on a regulated market in an EEA state.
Modification of definition of “IAS Regulation” in the case of PLCs
1116. The definition of “IAS Regulation” in section 274 (1) shall apply in the case of PLC as if “and a reference to Article 4 of that Regulation is, where the financial statements concerned are entity financial statements or the company concerned is not a traded company (within the meaning of section 1372 ), a reference to Article 5 of that Regulation” were substituted for “and a reference to Article 4 of that Regulation is, in the case of a private company limited by shares, a reference to Article 5 of that Regulation”.
Obligation for a PLC’s statutory financial statements to be audited
1117. The directors of a PLC shall arrange for the statutory financial statements of the PLC for a financial year to be audited by statutory auditors.
Statutory auditors’ report on revised financial statements and revised report
1118. Section 370 shall apply to a PLC as if, in subsection (1), “Subject to subsection (3)” were substituted for “Subject to section 371 and subsection (3)”.
Summary financial statements and circulation of them to members in lieu of full financial statements
1119. (1) The directors of a PLC may prepare in respect of each financial year a summary financial statement for that financial year derived from the statutory financial statements and the directors’ report for that period, giving a fair and accurate summary account of the PLC’s financial development during that financial year and financial position at the end of that year.
(2) The summary financial statement shall be approved by the board of directors and shall be signed by them or, if there are more than 2 directors, shall be signed on their behalf by 2 of them.
(3) Where the PLC has subsidiary undertakings or undertakings of substantial interest (within the meaning of section 314 ), the statement shall (so far as they are dealt with in the group financial statements) give an account of the financial development and position of the PLC and its subsidiary undertakings and other such undertakings.
(4) Every summary financial statement shall include a statement of the statutory auditors’ opinion as to its consistency with the statutory financial statements of the PLC and the directors’ report and its conformity with the requirements of this section.
(5) Not later than the day specified in subsection (6), a copy of—
(a) the summary financial statement, and
(b) where it includes a qualification, the statutory auditors’ report under section 391 ,
may, in lieu of the documents specified in section 338 (2), be sent by the PLC to every member who is entitled to notice of the meeting referred to in subsection (6) and to the Registrar.
(6) The day referred to in subsection (5) is the 21st day before the date of the annual general meeting at which the statutory financial statements and directors’ report of the PLC are to be considered.
(7) Every summary financial statement shall also include statements to the effect that—
(a) it is only a summary of information in the statutory financial statements and directors’ report;
(b) the statutory financial statements have been audited; and
(c) copies of the statutory financial statements, statutory auditors’ report and directors’ report will be available to members upon request;
and copies of those documents will, accordingly, be made available by the PLC to any member upon request.
(8) For the avoidance of doubt, the reference, in relation to non-statutory financial statements, in section 340 (4) to publication does not include the sending of a summary financial statement to a member in accordance with subsection (5).
(9) Section 347 (2) applies for the purpose of the construction of the reference to a copy of a document in subsection (5) of this section (in so far as the reference is to a copy to be sent to the Registrar) as it applies for the purpose of the construction of the reference to a copy of a document in section 347 (1).
Application of sections 310 to 313
1120. (1) For the purposes of this Part, sections 310 to 313 shall apply as if, in those sections, there were substituted for the references to a holding company of a credit institution preparing financial statements references to a PLC that is a credit institution preparing financial statements; but this adaptation does not displace those sections’ application in cases where—
(a) the holding company of the company concerned is a PLC that is a credit institution, or
(b) both the holding company and the company concerned are credit institutions.
(2) In particular, that adaptation does not limit the provisions of sections 310 to 313 that operate by reference to something that has been done to or in relation to a person connected with a director of a holding company of another company.
(3) Accordingly any exemption conferred, or requirement imposed, by any of those sections applies in respect of a transaction, arrangement or agreement (being a transaction, arrangement or agreement to which the PLC hereafter mentioned is a party) that is entered into or made with or for—
(a) a person connected with a director of a holding company of a PLC which PLC is a credit institution, or
(b) an officer of such a PLC,
as it applies in respect of a transaction, arrangement or agreement (being a transaction, arrangement or agreement to which such a PLC is a party) entered into or made with or for—
(i) a person connected with a director of such a PLC, or
(ii) an officer of such a PLC.
(4) Section 312 (3) to (6) shall not apply to a credit institution which is the wholly owned subsidiary of a company incorporated in the State.
CHAPTER 11
Debentures
Provisions as to register of debenture holders
1121. (1) A PLC shall keep a register of holders of debentures (the “debenture holders’ register”) of the PLC and enter therein the names and addresses of the debenture holders and the amount of debentures currently held by each.
(2) For the purposes of subsection (1), debentures do not include any debenture which does not form part of a series ranking pari passu nor any debenture which is transferable by delivery.
(3) Chapter 10 of Part 4 , as adapted by subsection (4), shall apply in relation to the debenture holders’ register.
(4) For the purposes of this section, Chapter 10 of Part 4 is adapted as follows:
(a) in section 215 (a), there shall be added the following definition:
“ ‘debenture holders’ register’ means the register kept by the company pursuant to section 1121 (1);”;
(b) section 216 (1) shall have effect as if, in addition to the registers specified in that provision as being registers to which section 216 applies, that provision specified the debenture holders’ register as being a register to which that section applies;
(c) subsection (7) of section 216 shall have effect as if after “it is closed under section 174 ” there were inserted “and, in the case of the debenture holders’ register, when it is deemed to be closed under section 1121 (6)”; and
(d) each of subsections (9), (11) and (12) of section 216 shall have effect as if, in addition to the registers specified in the particular subsection, there were specified in the particular subsection the debenture holders’ register.
(5) Section 127 (1) (access to documents during business hours) shall apply for the purposes of Chapter 10 of Part 4 , as that Chapter is adapted for the purposes of this section, as it applies in relation to the relevant provisions of Part 4 .
(6) For the purposes of section 216 (7), as adapted by subsection (4), the debenture holders’ register shall be deemed to be closed if closed in accordance with provisions contained in—
(a) the articles of the PLC; or
(b) the debentures, or in the case of debenture stock, in the stock certificates; or
(c) the trust deed or other document securing the debentures or debenture stock;
during such period or periods, not exceeding in the whole 30 days in any year, as may be specified in the document referred to in paragraph (a), (b) or (c).
(7) A copy of any trust deed for securing any issue of debentures shall be forwarded to every holder of any such debentures, at his or her request, by the PLC on payment to it of a fee of €10.00 or such less sum as may be determined by the PLC.
(8) If a copy of a trust deed referred to in subsection (7) is not forwarded by the PLC in accordance with that subsection, the PLC and any officer of it who is in default shall be guilty of a category 3 offence.
(9) In the case of a failure to comply with subsection (7), the court may, on application being made to it, make an order directing that the copy requested be forwarded to the person requesting it.
Uncertificated securities
Transfer in writing
1085. The following:
(a) section 6 of the Statute of Frauds 1695;
(b) section 28 (6) of the Supreme Court of Judicature (Ireland) Act 1877 ;
(c) section 94 (4); and
(d) any other enactment or rule of law requiring the execution, under hand or seal, of a document in writing for the transfer of property,
shall not apply (if they would otherwise do so) to any transfer of title to securities pursuant to—
(i) section 12 of the Electronic Commerce Act 2000 ; or
(ii) procedures authorised or required pursuant to regulations made by the Minister under section 1086 .
Power to make regulations for the transfer of securities
1086. (1) The Minister may make provision by regulations for enabling or requiring title to securities or any class of securities to be evidenced and transferred without a written instrument.
(2) Subject to any exceptions that may be specified in the regulations, the regulations may, in respect of—
(a) securities of public limited companies admitted to trading on a regulated market,
(b) securities of public limited companies admitted to trading on a market other than a regulated market, or
(c) securities of public limited companies of a specified class,
provide that the means provided by the regulations for evidencing and transferring title to such securities shall constitute the sole and exclusive means for doing so (and accordingly, that any purported transfer of such securities otherwise than by those means shall be void).
(3) In this section—
(a) “securities” means transferable securities as defined by Directive 2004/39/EC of the European Parliament and the Council of 21 April 2004;
(b) references to title to securities include any legal or equitable interest in securities; and
(c) references to a transfer of title include a transfer by way of security.
(4) The regulations may make provision—
(a) for procedures for recording and transferring title to securities; and
(b) for the regulation of those procedures and the persons responsible for or involved in their operation; and
(c) for dispensing with the obligations of a company under section 99 to issue certificates and providing for alternative procedures.
(5) The regulations shall contain such safeguards as appear to the Minister appropriate for the protection of investors and for ensuring that competition is not restricted, distorted or prevented.
(6) The regulations may, for the purpose of enabling or facilitating the operation of the new procedures, make provision with respect to the rights and obligations of persons in relation to securities dealt with under the procedures.
(7) The regulations shall be framed so as to secure that the rights and obligations in relation to securities dealt with under the new procedures correspond, so far as practicable, with those which would arise apart from any regulations under this section.
(8) The regulations may—
(a) require the provision of statements by a company to holders of securities (at specified intervals or on specified occasions) of the securities held in their name;
(b) make provision removing any requirement for the holders of securities to surrender existing share certificates to issuers; and
(c) make provision that the requirements of the regulations supersede any existing requirements in the articles of association of a company which would be incompatible with the requirements of the regulations.
Supplemental provisions in relation to section 1086
1087. (1) Without prejudice to the generality of subsections (5) to (8) of section 1086 , regulations under that section shall not contain provisions that would result in a person who, but for the regulations, would be entitled—
(a) to have his or her name entered in the register of members of a company, or
(b) to give instructions in respect of any securities,
ceasing to be so entitled.
(2) Regulations under section 1086 may include such supplementary, incidental and transitional provisions as appear to the Minister to be necessary or expedient.
(3) In particular, provision may be made for the purpose of giving effect to—
(a) the transmission of title of securities by operation of law;
(b) any restriction on the transfer of title to securities arising by virtue of the provisions of any enactment or instrument, court order or agreement;
(c) any power conferred by any such provision on a person to deal with securities on behalf of the person entitled.
(4) Regulations under section 1086 may, for the purposes mentioned in that section and this section, make provision with respect to the persons who are to be responsible for the operation of the new procedures and for those purposes may empower the Minister to delegate to any person willing and able to discharge them, any functions of the Minister under the regulations.
(5) Regulations under section 1086 may make different provision for different cases.
The text in italics on this page is sourced from the Irish Statute Book and is re-published under the Licence for Re-Use of Public Sector Information made pursuant to Directive 2003/98/EC Directive 2013/37/EU of the European Parliament and of the Council on the re-use of public sector information transposed into Irish law by the European Communities (Re-Use of Public Sector Information) Regulations 2005 to 2015.
S.I. No. 67/1997 –
European Communities (Public Limited Companies Subsidiaries) Regulations, 1997.
EUROPEAN COMMUNITIES (PUBLIC LIMITED COMPANIES SUBSIDIARIES) REGULATIONS, 1997.
I, RICHARD BRUTON, Minister for Enterprise and Employment, in exercise of the powers conferred on me by section 3 of the European Communities Act, 1972 (No. 27 of 1972), and for the purpose of giving effect to the provisions of Council Directive No. 92/101/EEC 1 of 23 November, 1992 hereby make the following Regulations:
Preliminary and General
1 Citation and construction
1. (1) These Regulations may be cited as the European Communities (Public Limited Companies Subsidiaries) Regulations, 1997.
(2) These Regulations shall be construed as one with the Companies Acts.
2 Commencement
2. These Regulations shall come into operation on the 1st day of March 1997.
3 Interpretation
3. (1) In these Regulations, unless the context otherwise requires,—
“the Companies Acts” means the Principal Act, and every enactment (including these Regulations) which is to be construed as one with that Act;
“the Principal Act” means the Companies Act, 1963 (No. 33 of 1963);
“the Act of 1986” means the Companies (Amendment) Act, 1986 (No. 25 of 1986);
“the Act of 1990” means the Companies Act, 1990 (No. 33 of 1990);
“the Directive of 1968” means Council Directive No. 68/151/EEC of 9 March 19682.
1O.J. No. L347, 28.11.92, p.p. 64-66.
2O.J. No. L65, 14.3.68, p.p. 8-12.
(2) In these Regulations, unless the context otherwise requires, a reference to a Regulation is to a Regulation of these Regulations, a reference to a paragraph is to a paragraph of the Regulation, and a reference to a subparagraph is to the subparagraph of the paragraph, in which the reference occurs.
4 Extension of meaning of “subsidary”
4. (1) For the purposes of Part XI of the Act of 1990, in addition to the circumstances where a company (including a body corporate) is deemed to be a subsidiary of a public limited company by virtue of section 155 of the Principal Act, a limited company (including a body corporate) within the meaning of paragraph (2) shall also be deemed to be a subsidiary of a public limited company if, but only if, the public limited company is itself a shareholder or member of the said limited company and controls alone, pursuant to an agreement with other shareholders or members, a majority of the shareholders’ or members’ voting rights in the company in question.
(2) For the purposes of this Regulation, a limited company (including a body corporate) is a company—
( a ) to which Article 1 of the Directive of 1968 applies, or
( b ) which is incorporated other than in a Member State of the European Union and is of a legal form comparable to the type of company referred to in paragraph (a).
(3) For the purposes of Part XI of the Act of 1990, a public limited company exercises its control indirectly where the control of a subsidiary is exercised through another subsidiary, pursuant to section 155 (1) (b) of the Principal Act.
(4) The first reference to a company in section 224 (1) of the Act of 1990 includes a body corporate.
5 Extension to section 224 of 1990 on holding of shares by subsidiaries
5. (1) In addition to section 224 of the Act of 1990, this Regulation shall apply where any holding company is a public limited company (in this Regulation referred to as a “parent public company”) and where its subsidiary (not being a subsidiary solely by virtue of paragraph (a) (ii) or (b) of subsection (1) of section 155 of the Principal Act) is a limited company (including a body corporate) of the type referred to in Regulation 4 (2) (in this Regulation referred to as a “public company subsidiary”).
(2) A public company subsidiary shall not—
( a ) subscribe for the shares of its parent public company, or
( b ) purchase shares in its parent public company which are not fully paid, or
( c ) provide financial assistance in accordance with subsections (2) to (11) of section 60 of the Principal Act for the purchase of or subscription for shares in its parent public company.
(3) If a public company subsidiary purports to act in contravention of paragraph (2) (a), it shall be guilty of an offence and the purported subscription shall be void.
(4) Where shares in a parent public company are subscribed for by a nominee of a public company subsidiary in contravention of paragraph (2), then for all purposes the shares shall be treated as held by the nominee on his own account and the public company subsidiary shall be regarded as having no beneficial interest in them, and the provisions of subsections (2) to (6) of section 42 of the Companies (Amendment) Act, 1983 , shall, with any necessary modifications, apply.
(5) Without prejudice to any other requirements contained in or penalties imposed by the Companies Acts, where a public company subsidiary purchases, subscribes for or holds shares in its parent public company, and—
( a ) the shares were not fully paid when they were purchased, or
( b ) the authorisation required by section 224 (3) of the Act of 1990 has not been obtained, or
( c ) the shares are held as treasury shares in excess of the limit referred to in section 209 (2) of that Act, or
( d ) the purchase or subscription was in contravention of paragraph (2) (c),
then, unless the shares or any interest of the public company subsidiary in them are previously disposed of, the provisions of section 43 (3) of the Companies (Amendment) Act, 1983 , shall, with the modification that the “relevant period” in relation to any shares shall be 12 months and with any other necessary modifications, apply to the public company subsidiary in respect of such shares.
(6) This Regulation shall not affect or prohibit—
( a ) the subscription for, acquisition or holding of, shares in its parent public company by a public company subsidiary where the public company subsidiary is concerned as personal representative or where it is concerned as trustee unless the parent public company or a subsidiary thereof is beneficially interested under the trust and is not so interested only by way of security for the purposes of a transaction entered into by it in the ordinary course of a business which includes the lending of money;
( b ) the allotment to, or holding by, a public company subsidiary of shares in its parent public company in the circumstances set out in section 32 (5) of the Principal Act, but where the shares so allotted are held as treasury shares and the nominal value of treasury shares held by the public company subsidiary exceeds the limit referred to in section 209 (2) of the Act of 1990 then, unless the shares or any interest of the public company subsidiary in them are previously disposed of, the provisions of section 43 (3) of the Companies (Amendment) Act, 1983 , shall with the modification that the relevant period in relation to any shares shall be 3 years and with any other necessary modifications, apply to the public company subsidiary in respect of such shares;
( c ) the subscription, acquisition or holding of shares in its parent public company by a public company subsidiary where the subscription, acquisition or holding is effected on behalf of a person other than the person subscribing, acquiring or holding the shares, who is neither the parent public company itself nor a subsidiary within the meaning of Part XI of the Act of 1990 of the said parent public company;
( d ) the subscription, acquisition or holding of shares in its parent public company by a public company subsidiary which is a member of an approved stock exchange specified in section 17 (2) of the Stock Exchange Act, 1995 (No. 9 of 1995), acting in its capacity as a professional dealer in securities in the normal course of its business.
(7) A person guilty of an offence under this Regulation shall be liable on summary conviction to a fine not exceeding £500 or to imprisonment for a term not exceeding 6 months, or to both such fine and such imprisonment.
(8) ( a ) Where an offence under this Regulation has been committed by a public company subsidiary and is proved to have been committed with the consent or connivance of or to be attributable to any neglect on the part of a person being a director, manager, secretary or other similar officer of the public company subsidiary, or a person who was purporting to act in any such capacity, that person as well as the body corporate shall be guilty of an offence and shall be liable to be proceeded against and punished as if he or she were guilty of the first-mentioned offence.
( b ) Where the affairs of a public company subsidiary are managed by its members, paragraph (a) shall apply in relation to the acts and defaults of a member in connection with his or her functions of management as if he or she were a director of the public company subsidiary.
6 Information in directors’ report regarding acquisitions by company of own shares
6. Section 14 of the Act of 1986 shall also apply where, in any financial year of a company, shares in the company are acquired in a public limited company by a subsidiary pursuant to section 224 of the Act of 1990, and references in paragraphs (i), (ii) and (iii) of that section to “another person” shall be read as including a subsidiary company of a public limited company, pursuant to Part XI of that Act.
GIVEN under my Official Seal, this 5th day of February, 1997.
RICHARD BRUTON,
Minister for Enterprise and Employment.
EXPLANATORY NOTE.
The purpose of these Regulations is to give legal effect to Council Directive 92/101/EEC which amends the Second Directive (Formation and Capital of Public Limited Companies) to apply conditions on the purchase of shares in a PLC by subsidiaries of that PLC.
Part XI of the Companies Act, 1990 already substantially implements Directive 92/101/EEC. It is proposed to complete the implementation process by extending the definition of subsidiary for the purposes of Part XI of the 1990 Act, and applying the additional requirements of the Directive to directly controlled subsidiaries.
Regulations 1-3 provide for citation, commencement and interpretation of the Regulations.
Regulation 4 extends the definition of subsidiary of a public limited company for the purposes of Part XI of the Companies Act, 1990 .
Regulation 5 applies the conditions relating to the subscription, acquisition or holding of shares by a public company itself to the subscription, acquisition or holding of shares by any subsidiary of the type referred to in the Directive in its parent public limited company. It also sets out the penalty for those found guilty of an offence.
Regulation 6 extends the requirements on directors to disclose information about acquisition by a PLC of its own shares, to acquisition by a subsidiary (as defined) company of shares in its parent PLC.
S.I. No. 89/2008 –
European Communities (Public Limited Companies Directive 2006/68/Ec) Regulations 2008
EUROPEAN COMMUNITIES (PUBLIC LIMITED COMPANIES — DIRECTIVE 2006/68/EC) REGULATIONS 2008
Notice of the making of this Statutory Instrument was published in
“Iris Oifigiúil” of 8th April, 2008.
I, MICHE ?L MARTIN, Minister for Enterprise, Trade and Employment, in exercise of the powers conferred on me by section 3 (amended by section 2 of the European Communities Act 2007 (No. 18 of 2007)) of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive 2006/68/EC 1 of the European Parliament and of the Council of 6 September 2006 amending Council Directive 77/91/EEC, as regards the formation of public limited liability companies and the maintenance and alteration of their capital, hereby make the following regulations:
Citation, commencement and construction.
1. (1) These Regulations may be cited as the European Communities (Public Limited Companies — Directive 2006/68/EC) Regulations 2008.
(2) These Regulations shall come into operation on 15 April 2008.
Interpretation.
2. (1) In these Regulations—
“Act of 1963” means the Companies Act 1963 (No. 33 of 1963);
“Act of 1990” means the Companies Act 1990 (No. 33 of 1990);
(2) A word or expression that is used in the amendments to the Act of 1963 or the Act of 1990, effected by these Regulations, and that is also used in the Directive has, in those amendments, the same meaning as it has in the Directive.
Amendment of Act of 1963.
3. The Act of 1963 is amended—
(a) in section 73(2), by—
(i) substituting the following paragraphs for paragraphs (a) and (b):
“(a) in the case of a public limited company—
(i) every creditor of the company who—
(I) at the date fixed by the court, is entitled to a debt or claim that, if that date were the commencement of the winding up of the company, would be admissible in proof against the company, and
(II) can credibly demonstrate that the proposed reduction in the share capital would be likely to put the satisfaction of that debt or claim at risk, and that no adequate safeguards have been obtained from the company, is entitled to object to the reduction, and
(ii) the court shall settle a list of creditors entitled to object, and for that purpose may publish notices fixing a day or days within which creditors are to claim to be entered on the list or are to be excluded from the right of objecting to the reduction of capital;
(b) in the case of any other company—
(i) every creditor of the company who, at the date fixed by the court, is entitled to any debt or claim that, if that date were the commencement of the winding up of the company, would be admissible in proof against the company is entitled to object to the reduction;
(ii) the court shall settle a list of creditors so entitled to object, and for that purpose shall ascertain, as far as possible without requiring an application from any creditor, the names of those creditors and the nature and amount of their debts or claims, and may publish notices fixing a day or days within which creditors not entered on the list are to claim to be so entered or are to be excluded from the right of objecting to the reduction;”, and
(ii) by inserting “in either case,” before “where” in paragraph (c), and
(b) in section 77, by substituting “a company (other than a public limited company) the subject of an application under section 73” for “the company”.
Amendment of Act of 1990.
4. The Act of 1990 is amended—
(a) in section 207(2)(d), by substituting the following subparagraph for subparagraph (i):
“(i) Subject to subparagraph (ii), no such shares shall be redeemed otherwise than—
(I) out of profits available for distribution, and
(II) if the company is a public limited company, in accordance with the restriction on the distribution of assets specified in section 46 of the Companies (Amendment) Act 1983 .”, and
(b) in section 211—
(i) by inserting “subsection (4) and ” after “Subject to” in subsection (1), and
(ii) by inserting the following subsection after subsection (3):
“(4) This section has effect without prejudice to—
(a) the principle of equal treatment of all shareholders who are in the same position,
(b) the Market Abuse (Directive 2003/6/EC) Regulations 2005 ( S.I. No. 342 of 2005 ), and
(c) Part 4 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 .”.
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GIVEN under my Official Seal,
3 April 2008
MICHE ?L MARTIN.
Minister for Enterprise, Trade and Employment
EXPLANATORY NOTE
(This note is not part of the Instrument and does not purport to be a legal interpretation).
These Regulations give effect to certain provisions of Directive 2006/68/EC of the European Parliament and the Council of 6 September 2006 which amended Council Directive 77/91/EEC as regards the formation of public limited liability companies and the maintenance and alteration of their capital. The areas covered by the Regulations are matters relating to creditor protection in cases of capital reduction and purchase by a company of its own shares.
1 OJ L264, 25.9.2006, p.64.
S.I. No. 316/2009 –
Shareholders’ Rights (Directive 2007/36/ec) Regulations 2009
SHAREHOLDERS’ RIGHTS (DIRECTIVE 2007/36/EC) REGULATIONS 2009
Notice of the making of this Statutory Instrument was published in
“Iris Oifigiúil” of 11th August, 2009.
I, MARY COUGHLAN, Minister for Enterprise, Trade and Employment, in exercise of the powers conferred on me by section 3 (amended by section 2 of the European Communities Act 2007 (No. 18 of 2007)) of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 1 , hereby make the following regulations:
Citation, commencement and construction.
1. (1) These Regulations may be cited as the Shareholders’ Rights (Directive 2007/36/EC) Regulations 2009.
(2) These Regulations shall come into operation on the date on which they are made and shall apply in relation to meetings of which notice is given, or first given, on or after that date.
(3) These Regulations shall be read as one with the Companies Acts.
Definition.
2. In these Regulations, “Act of 1963” means the Companies Act 1963 (No. 33 of 1963).
Amendment of section 2 (General provisions as to interpretation) of Act of 1963.
3. Section 2 of the Act of 1963 is amended—
(a) by inserting the following definitions:
“ ‘company traded on a regulated market’ means a company whose registered office is in the State and whose shares are admitted to trading on a regulated market situated or operating within a Member State and does not include—
(a) collective investment undertakings within the meaning of Article 1(2) of Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) 2 , or
(b) undertakings the sole object of which is the collective investment of capital provided by the public within the meaning of Article 1(3)(b) of Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies 3 ;
‘Directive 2004/25/EC’ means Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004, on takeover bids 4 ;
‘electronic means’ are means of electronic equipment for the processing (including digital compression), storage and transmission of data, employing wires, radio, optical technologies, or any other electromagnetic means;”, and
(b) by substituting the following definition for the definition of “regulated market”;
“ ‘regulated market’ has the same meaning as in Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments; 5 ”.
Amendment of section 132 (Convening of extraordinary general meeting on requisition) of Act of 1963.
4. Section 132 of the Act of 1963 is amended by inserting the following subsection after subsection (1):
“(1A) Notwithstanding subsection (1) or anything in its articles, the directors of a company traded on a regulated market, shall, on the requisition of members of the company holding at the date of the deposit of the requisition not less than 5 per cent of such of the paid up capital of the company as at the date of the deposit carries the right of voting at general meetings of the company, forthwith proceed duly to convene an extraordinary general meeting of the company.”.
New section 132A in Act of 1963.
5. The Act of 1963 is amended by inserting the following section after section 132:
“Equal treatment of members.
132A. A company traded on a regulated market shall ensure equal treatment for all members who are in the same position with regard to the exercise of voting rights and participation in a general meeting.”.
Amendment of section 133 (Length of notice for calling meetings) of Act of 1963.
6. Section 133 of the Act of 1963 is amended—
(a) in subsection (1)(b), by substituting “or an unlimited company, and” for “or an unlimited company.”,
(b) in subsection (1), by inserting the following paragraph after paragraph (b):
“(c) in the case of a company traded on a regulated market, without prejudice to Articles 9(4) and 11(4) of Directive 2004/25/EC—
(i) in the case of an annual general meeting, 21 days’ notice in writing, and
(ii) in the case of a general meeting (other than an annual general meeting or a meeting for the passing of a special resolution) 14 days’ notice in writing where—
(I) the company offers the facility for members to vote by electronic means accessible to all members who hold shares that carry rights to vote at general meetings, and
(II) a special resolution reducing the period of notice to 14 days has been passed at the immediately preceding annual general meeting, or at a general meeting held since that meeting.”,
(c) in subsection (2)(b), by substituting “or an unlimited company, and” for “or an unlimited company.”,
(d) in subsection (2), by inserting the following paragraph after paragraph (b):
“(c) in the case of a company traded on a regulated market, without prejudice to Articles 9(4) and 11(4) of Directive 2004/25/EC—
(i) in the case of an annual general meeting, 21 days’ notice in writing, and
(ii) in the case of a general meeting (other than an annual general meeting or a meeting for the passing of a special resolution) 14 days’ notice in writing where—
(I) the company offers the facility for members to vote by electronic means accessible to all members who hold shares that carry rights to vote at general meetings, and
(II) a special resolution reducing the period of notice to 14 days has been passed at the immediately preceding annual general meeting, or at a general meeting held since that meeting.”,
and
(e) in subsection (3) by inserting “, other than a company traded on a regulated market,” after “A meeting of a company”.
New sections 133A and 133B in Act of 1963.
7. The Act of 1963 is amended by inserting the following sections after section 133:
“Further provisions on notice.
133A. (1) Notwithstanding section 13 or anything contained in its articles, this section applies to a company traded on a regulated market.
(2) Notice of a general meeting shall be issued, free of charge, in a manner ensuring fast access to the notice on a non-discriminatory basis, using such media as may reasonably be relied upon for the effective dissemination of information to the public throughout Member States.
(3) Notice of a general meeting under subsections (1)(c) and (2)(c) of section 133 shall set out:
(a) when and where the meeting is to take place and the proposed agenda for the meeting;
(b) a clear and precise statement of any procedures a member must comply with in order to participate and vote in the meeting, including—
(i) the right of a member to put items on the agenda of a general meeting and to table draft resolutions pursuant to section 133B and to ask questions relating to items on the agenda pursuant to section 134C, and the time limits applicable to the exercise of any of those rights,
(ii) the right of a member entitled to attend, speak, ask questions and vote, to appoint a proxy pursuant to section 136 (including a proxy who is not a member) by electronic means or otherwise or, where allowed, one or more proxies, to attend, speak, ask questions and vote instead of the member,
(iii) the procedure for voting by proxy pursuant to section 136, including the forms to be used and the means by which the company is prepared to accept electronic notification of the appointment of a proxy, and
(iv) the procedure (where applicable) to be followed pursuant to sections 134B and 138 for voting electronically or by correspondence respectively;
(c) the record date for eligibility for voting as defined in section 134A and state that only members registered on the record date shall have the right to participate and vote in the general meeting;
(d) where and how the full, unabridged text of the documents and draft resolutions referred to in subsection 4(c) and (d) may be obtained, and
(e) the internet site at which the information contained in subsection (4) shall be made available.
(4) A company shall make available to its members on its internet site, for a continuous period beginning not later than 21 days before a general meeting (inclusive of the day of the meeting), the following—
(a) a notice under section 133A(2),
(b) the total number of shares and voting rights at the date of the giving of the notice (including separate totals for each class of shares where the company’s capital is divided into 2 or more classes of shares),
(c) the documents to be submitted to the meeting,
(d) a copy of any draft resolution or, where no such resolution is proposed to be adopted, a comment from the board of directors on each item of the proposed agenda of the meeting,
(e) a copy of forms to be used to vote by proxy and to vote by correspondence unless these forms are sent directly to each member.
(5) The company shall make available, on its internet site as soon as possible following their receipt, draft resolutions tabled by members.
(6) Where the forms referred to in subsection (4)(e) cannot be made available on the company’s internet site for technical reasons, the company shall indicate on its internet site how the forms may be obtained in hard copy form and the company shall send the forms by post, free of charge, to every member who requests them.
(7) Where notice of a general meeting is issued later than on the twenty first day before the meeting pursuant to section 133(1)(c)(ii) or 133(2)(c)(ii) or Articles 9(4) or 11(4) of Directive 2004/25/EC, the period specified in subsection (4) shall be reduced accordingly.
Right to put items on the agenda of the general meeting and to table draft resolutions.
133B. (1) A member of a company traded on a regulated market, shall have the right, by electronic or postal means, at an address specified by the company, to—
(a) put an item on the agenda of an annual general meeting, provided that each such item is accompanied by stated grounds justifying its inclusion or a draft resolution to be adopted at the general meeting, and
(b) table a draft resolution for an item on the agenda of a general meeting,
subject to the member or members concerned holding 3 per cent of the issued share capital, representing at least 3 per cent of the total voting rights of all the members who have a right to vote at the meeting to which the request for inclusion of the item relates.
(2) A request by a member to put an item on the agenda or to table a draft resolution under subsection (1)(a) shall be received by the company in hardcopy form or in electronic form at least 42 days before the meeting to which it relates.
(3) Where the exercise of the right conferred by subsection (1)(a) involves a modification of the agenda for the annual general meeting, in situations where the agenda has already been communicated to the members, and only in such situations, the company shall make available a revised agenda in the same manner as the previous agenda in advance of the applicable record date (as defined in section 134A) of share-ownership for purposes of entitlement to vote, or, if no such record date applies, sufficiently in advance of the date of the annual general meeting so as to enable other members to appoint a proxy or, where applicable, to vote by correspondence.
(4) In order to facilitate a member to avail of subsection (1)(a), the company shall ensure that the date of the next annual general meeting is placed on its internet site by—
(a) the end of the previous financial year, or
(b) not later than 70 days prior to the annual general meeting,
whichever is the earlier.”.
New sections 134A, 134B and 134C in Act of 1963.
8. The Act of 1963 is amended by inserting the following sections after section 134:
“Requirements for participation and voting in general meeting.
134A. (1) This section applies to a company traded on a regulated market.
(2) In this section—
‘record date’ means a date not more than 48 hours before the general meeting to which it relates;
‘register of securities’ has the same meaning as it has in Regulation 3 of the Companies Act 1990 (Uncertificated Securities) Regulations 1996 ( S.I. No. 68 of 1996 ).
(3) A person shall be entered on the relevant register of securities by the record date in order to exercise the right of a member to participate and vote at a general meeting and any change to an entry on the relevant register of securities after the record date shall be disregarded in determining the right of any person to attend and vote at the meeting.
(4) The right of a member to participate in a general meeting and to vote in respect of his shares shall not be subject to any requirement that the shares be deposited with, or transferred to, or registered in the name of another person before the general meeting.
(5) A member is free to sell or otherwise transfer shares in a company at any time between the record date and the general meeting to which it applies if the right to sell would not otherwise be subject to such a restriction.
(6) Proof of qualification as a member may be made subject only to such requirements as are necessary to ensure the identification of the member and only to the extent that such requirements are proportionate to the achievement of that objective.
Participation in general meeting by electronic means.
134B. (1) A company traded on a regulated market may provide for participation in a general meeting by electronic means including—
(a) a mechanism for casting votes, whether before or during the meeting, and the mechanism adopted shall not require the member to be physically present at the meeting or require the member to appoint a proxy who is physically present at the meeting,
(b) real time transmission of the meeting,
(c) real time two way communication enabling members to address the meeting from a remote location.
(2) (a) The use of electronic means pursuant to subsection (1) may be made subject only to such requirements and restrictions as are necessary to ensure the identification of those taking part and the security of the electronic communication, to the extent that such requirements and restrictions are proportionate to the achievement of those objectives.
(b) Members shall be informed of any requirements or restrictions which a company puts in place pursuant to paragraph (a).
(c) A company that provides electronic means for participation at a general meeting by a member shall ensure, as far as practicable, such means—
(i) guarantee the security of any electronic communication by the member,
(ii) minimise the risk of data corruption and unauthorised access,
(iii) provide certainty as to the source of the electronic communication, and
(iv) are remedied as soon as practicable, in the case of any failure or disruption.
Right to ask questions.
134C. (1) A member of a company traded on a regulated market has the right to ask questions related to items on the agenda of a general meeting and to have such questions answered by the company subject to any reasonable measures the company may take to ensure the identification of the member.
(2) An answer to a question asked pursuant to subsection (1) is not required where—
(a) to give an answer would interfere unduly with the preparation for the meeting or the confidentiality and business interests of the company,
(b) the answer has already been given on the company’s internet site in a question and answer forum, or
(c) it appears to the Chairman of the meeting that it is undesirable in the interests of good order of the meeting that the question be answered.”.
Amendment of section 136 (Proxies) of Act of 1963.
9. Section 136 of the Act of 1963 is amended by—
(a) inserting the following subsections after subsection (1):
“(1A) (a) This subsection applies to a company traded on a regulated market.
(b) A proxy appointed may be any natural or legal person (whether a member or not) and shall act in accordance with any instructions given by the member by whom the proxy is appointed.
(c) A proxy shall be appointed by written notification to a company or by electronic means.
(d) A member shall be entitled to—
(i) appoint a proxy by electronic means, to an address specified by the company,
(ii) have the electronic notification of such appointment accepted by the company, and
(iii) have at least one effective method of notification of a proxy by electronic means offered to it by a company.
(e) The appointment and notification of appointment of a proxy to a company and the issuing of voting instructions to a proxy may be subject only to such formal requirements as are necessary to ensure identification of a member, or the proxy, or the possibility of verifying the content of voting instructions, if any, and only to the extent that those requirements are proportionate to achieving those objectives.
(IB) Subsection (IA) shall apply mutatis mutandis to the revocation of the appointment of a proxy.”, and
(b) by inserting the following subsection after subsection (2):
“(2A) Notwithstanding subsection (2) or anything in its articles, in the case of a company traded on a regulated market—
(a) no limitation may be placed on the right of a member to appoint more than one proxy to attend and vote at a general meeting in respect of shares held in different securities accounts, and
(b) subject to paragraph (a), a member shall not be entitled to appoint more than one proxy to attend and vote on the same occasion, provided however that a member (being a natural or legal person) acting as an intermediary on behalf of a client, shall not be prohibited from granting a proxy to each of his clients or to any third party designated by a client. Such intermediary shall be permitted to cast votes attaching to some of the shares differently from others.”, and
(c) by inserting the following subsection after subsection (4);
“(4A) Any provision contained in the articles of a company traded on a regulated market (other than a requirement that a person appointed as a proxy shall possess legal capacity) shall be void in so far as it would have the effect of restricting the eligibility of a person to be appointed as a proxy.”.
Substitution of section 138 of Act of 1963.
10. The Act of 1963 is amended by substituting the following section for section 138:
“
Voting on a poll.
138. (1) On a poll taken at a meeting of a company or a meeting of any class of members of a company, a member, whether present in person or by proxy, entitled to more than one vote need not, if he votes, use all his votes or cast all the votes he uses in the same way.
(2) A company traded on a regulated market, may provide for a vote exercised under subsection (1) to include a vote cast in advance by correspondence, subject only to such requirements and restrictions as are necessary to ensure the identification of the person voting, and as are proportionate to the achievement of that objective.
(3) A company traded on a regulated market shall only be required to count votes cast in advance by correspondence pursuant to subsection (2), where such votes are received before the date and time specified by the company, provided the date and time is no more than 24 hours before the time at which the vote is to be concluded.”.
Amendment of section 139 of Act of 1963.
11. Section 139(1) of the Act of 1963 is amended-
(a) in paragraph (a) by deleting “and”,
(b) in paragraph (b) by substituting “may be, and” for “may be.”, and
(c) by inserting the following paragraph after paragraph (b):
“(c) if it has been appointed as the proxy to attend and vote at a general meeting of a company traded on a regulated market on behalf of a member of the company, by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the company or at any meeting of any class of members of the company for the purpose of such appointment.”.
New section 145A of Act of 1963.
12. The Act of 1963 is amended by inserting the following section after section 145:
“
Voting Results.
145A. (1) This section applies to a company traded on a regulated market.
(2) Where a member requests a full account of a vote before or on the declaration of the result of a vote at a general meeting, then with respect to each resolution proposed at a general meeting the company shall establish—
(a) the number of shares for which votes have been validly cast,
(b) the proportion of the company’s issued share capital at close of business on the day before the meeting represented by those votes,
(c) the total number of votes validly cast, and
(d) the number of votes cast in favour of and against each resolution and, if counted, the number of abstentions.
(3) Where no member requests a full account of the voting before or on the declaration of the result of a vote at a general meeting, it shall be sufficient for the company to establish the voting results only to the extent necessary to ensure that the required majority is reached for each resolution.
(4) A company shall ensure that a voting result established in accordance with this section is published on its internet site not later than the end of the fifteenth day after the date of the meeting at which the voting result was obtained.”.
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GIVEN under my Official Seal,
6 August 2009.
MARY COUGHLAN,
Minister for Enterprise, Trade and Employment.
EXPLANATORY NOTE
(This note is not part of the instrument and does not purport to be a legal interpretation)
These Regulations give effect to the provisions of Directive 2007/36/EC of the European Parliament and of the Council of 11th July 2007 on the exercise of certain rights of shareholders attaching to voting shares in relation to general meetings of companies which have their registered office in the State and whose shares are admitted to trading on a regulated market situated or operating within a Member State. The Regulations amend several sections of the Companies Act 1963 dealing with the subject matter of the Directive, the effect of which is to enhance some existing rights contained in Irish company law and provide for some new rights in this area.
1 OJ L 184, 14.7.2007, p. 17
2 OJ L 375, 31.12.1985, p. 3.
3 OJ L 184, 14.07.2007, p. 17.
4 OJ L 142, 30.4.2004, p.1
5 OJ L 145, 30.4.2004
S.I. No. 81/2020 –
European Union (Shareholders’ Rights) Regulations 2020
Notice of the making of this Statutory Instrument was published in “Iris Oifigiúil” of 20th March, 2020.
The Minister for Business, Enterprise and Innovation, in exercise of the powers conferred on her by section 3 of the European Communities Act 1972 (No. 27 of 1972) and for the purpose of giving effect to Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement1 , hereby makes the following regulations:
Citation, construction and commencement
1. (1) These Regulations may be cited as the European Union (Shareholders’ Rights) Regulations 2020.
(2) These Regulations shall be read as one with the Companies Act 2014 (No. 38 of 2014).
(3) These Regulations shall come into operation on 30 March 2020.
Definition
2. In these Regulations, “Principal Act” means the Companies Act 2014 .
Amendment of section 1000 of Principal Act
3. Section 1000 of the Principal Act is amended, in subsection (1) –
(a) by the substitution of the following definition for the definition of “regulated market”:
“ ‘regulated market’ has the meaning given to it by point (21) of Article 4(1) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast)2 ;”,
and
(b) by the insertion of the following definition:
“ ‘Shareholders’ Rights Directive’ means Directive (EU) 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies3 , as amended by –
(a) Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No. 1093/2010 and (EU) No. 648/2012, of the European Parliament and of the Council4 , and
(b) Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement1 ;”.
Amendment of section 1092 of Principal Act
4. Section 1092 of the Principal Act is amended –
(a) in subsection (1), by the substitution of “Subject to subsection (4), each” for “Each”,
(b) in subsection (2), by the substitution of “Subject to section 1110M, the remuneration of” for “The remuneration of”, and
(c) by the insertion of the following subsection:
“(4) Where Chapter 8C applies to a PLC, nothing in this section shall be read as disapplying, or allowing a PLC to disapply, a requirement under that Chapter.”.
Amendment of section 1099 of Principal Act
5. Section 1099 of the Principal Act is amended –
(a) by the substitution of the following subsection for subsection (1):
“(1) Sections 1100 to 1110 have effect in relation to –
(a) a notice of a general meeting given by a traded PLC, and
(b) otherwise in relation to a general meeting of a traded PLC.”,
(b) in subsection (3), by the insertion of “and Chapters 8A, 8B, 8C and 8D” after “1100 to 1110”, and
(c) by the insertion of the following subsection:
“(4) In this section, and sections 1100 to 1110, ‘traded PLC’ means a PLC –
(a) whose shares are admitted to trading on a regulated market in any Member State, and
(b) that is neither –
(i) an undertaking for collective investment in transferrable securities within the meaning of Article 1(2) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)5 , nor
(ii) a collective investment undertaking within the meaning of point (a) of Article 4(1) of Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No. 1060/2009 and (EU) No. 1095/20106 .”.
Modification of application of section 325(1) to traded PLC
6. The Principal Act is amended by the insertion of the following section after section 1102:
“1102A. In its application to a traded PLC, section 325(1) shall apply as if the following paragraph were inserted after paragraph (e):
‘(f) a remuneration report in accordance with section 1110N;’.”.
Insertion of Chapters 8A, 8B, 8C and 8D into Part 17 of Principal Act
7. Part 17 of the Principal Act is amended by the insertion of the following Chapters after Chapter 8:
“CHAPTER 8A
Rights of shareholders
Interpretation, application and commencement (Chapter 8A)
1110A. (1) In this Chapter –
‘General Data Protection Regulation’ means Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation)7 ;
‘intermediary’ means a person, whether situated in a Member State or elsewhere, that provides services, in relation to a traded PLC, of safekeeping of shares, administration of shares or maintenance of securities accounts on behalf of shareholders or other persons, and includes –
(a) an investment firm as defined in Regulation 3 of the European Union (Markets in Financial Instruments) Regulations 2017 (S.I. No. 375 of 2017),
(b) a credit institution as defined in point (1) of Article 4(1) of Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No. 648/20128 , and
(c) a central securities depository as defined in point (1) of Article 2(1) of Regulation (EU) No. 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories and amending Directives 98/26/EC and 2014/65/EU and Regulation (EU) No. 236/20129 ;
‘personal data’ has the meaning assigned to it in the General Data Protection Regulation;
‘traded PLC’ has the meaning assigned to it by section 1099(4).
(2) A word or expression that is used in this Chapter and is also used in the Shareholders’ Rights Directive has, unless the context otherwise requires, the same meaning in this Chapter as it has in that Directive.
(3) This Chapter shall be read in conjunction with any applicable provision of European Union law adopted by the European Commission as an implementing act in accordance with the Shareholders’ Rights Directive, including Commission Implementing Regulation (EU) 2018/1212 of 3 September 2018 laying down minimum requirements implementing the provisions of Directive 2007/36/EC of the European Parliament and of the Council as regards shareholder identification, the transmission of information and the facilitation of the exercise of shareholders rights10 .
(4) This section shall come into operation on 3 September 2020.
Identification of shareholders
1110B. (1) (a) A traded PLC, or its nominee referred to in paragraph (c), may request, from an intermediary that provides services with respect to the shares of the traded PLC –
(i) information regarding shareholder identity that relates to shares held in that traded PLC, and
(ii) the details of the next intermediary, if any, in the chain of intermediaries.
(b) A requester may state, in a request, that the information to which the request relates is to be provided to the requester by the intermediary from whom it is requested.
(c) A traded PLC may nominate a third party to make a request on its behalf.
(d) In this section, ‘request’ means a request under paragraph (a), and ‘requester’ means the person making the request.
(2) (a) An intermediary that receives a request and is in possession or control of the information to which that request relates shall, as soon as practicable, provide the requester with that information.
(b) An intermediary that receives a request and is not in possession or control of the information to which that request relates shall, as soon as practicable –
(i) inform the requester that it is not in possession or control of the information,
(ii) where the intermediary is part of a chain of intermediaries, transmit the request to each other intermediary in the chain known to the first-mentioned intermediary as being part of the chain, and
(iii) provide the requester with the details of each intermediary, if any, to which the request has been transmitted under subparagraph (ii).
(3) (a) (i) Subparagraph (ii) applies to an intermediary that –
(I) receives a request transmitted to it under subsection (2)(b), and
(II) is in possession or control of the information to which that request relates.
(ii) An intermediary to which this subparagraph applies, shall, as soon as practicable, provide the information to which the request relates –
(I) where the requester has made a statement under subsection (1)(b), to the intermediary that transmitted the request in accordance with subsection (2)(b), or
(II) where a requester has not made a statement under subsection (1)(b), to the requester.
(b) An intermediary that receives information under subparagraph (a)(ii)(I) shall, as soon as practicable, provide the information to the requester.
(4) Subject to subsection (5), the personal data of shareholders may be processed by a requester, traded PLC or intermediary under this section, in so far as it is necessary to –
(a) enable a traded PLC to –
(i) identify its existing shareholders in accordance with this section, or
(ii) communicate with the shareholders directly, or
(b) facilitate the exercise of shareholder rights and shareholder engagement with the traded PLC.
(5) Without prejudice to any longer storage period laid down by European Union law, and subject to subsection (6), where a requester or intermediary receives or otherwise processes the personal data of a person who is a shareholder in accordance with this section, that personal data shall not be so processed for longer than 12 months after the requester or intermediary, as the case may be, has become aware that the person concerned has ceased to be a shareholder.
(6) Subject to compliance with the Data Protection Acts 1988 to 2018 and the General Data Protection Regulation, a traded PLC or intermediary may process the personal data of shareholders in so far as doing so is necessary for any of the following purposes:
(a) carrying out, or facilitating the carrying out of, an investigation into suspected or alleged offences in relation to the traded PLC;
(b) engaging in or facilitating litigation relating to the shareholder or shareholders to whom the personal data relates;
(c) maintaining records of, and otherwise dealing with, unclaimed dividend entitlements;
(d) disposing of, or otherwise dealing with, shares of untraced shareholders;
(e) dealing with queries from former or current shareholders relating to their shares, including queries regarding historic transactions;
(f) adducing evidence of transactions, changes in ownership or dispositions of shares having taken place;
(g) compliance with applicable accounting, regulatory or tax requirements;
(h) compliance with any direction, instruction or other request from a regulatory or supervisory body;
(i) compliance with any provision of this Act.
(7) An intermediary that discloses information regarding the identity of a shareholder in accordance with this section shall not be considered to be in breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision.
(8) This section shall come into operation on 3 September 2020.
Transmission of information
1110C.(1) Subject to subsection (3), where a shareholder in a traded PLC requires information in order to exercise rights attaching to the shareholder’s shares, the traded PLC shall, as soon as practicable after becoming aware of that requirement, provide an intermediary that provides services in relation to that shareholder’s shares with –
(a) that information, or
(b) where the information is available on the traded PLC’s website, a notice indicating where on the website the information can be found.
(2) (a) Subject to paragraph (b) and subsection (3), an intermediary (in this subsection referred to as a ‘relevant intermediary’) who is provided with the relevant information shall, as soon as practicable, transmit the relevant information to the shareholder to whom it relates.
(b) Where a relevant intermediary cannot transmit the relevant information directly to the shareholder to whom it relates, and the relevant intermediary is part of a chain of intermediaries, the relevant intermediary shall, as soon as practicable, transmit the relevant information to each other intermediary in the chain of intermediaries known to the relevant intermediary as being part of the chain.
(c) An intermediary to whom relevant information is transmitted under paragraph (b) and who can transmit the relevant information directly to the shareholder to whom it relates shall, as soon as practicable, transmit the information directly to that shareholder.
(3) Where a traded PLC transmits relevant information directly to the shareholder to whom it relates, subsections (1) and (2) shall not apply in so far as that information is concerned.
(4) (a) Subject to paragraphs (b) and (c), where a shareholder in a traded PLC has given to an intermediary (in this subsection referred to as a ‘relevant intermediary’) an instruction relating to the exercise of rights attaching to the shareholder’s shares (in this subsection referred to as the ‘relevant instruction’), the intermediary shall, as soon as practicable and in accordance with the relevant instruction, transmit the information to which the relevant instruction relates to the traded PLC.
(b) Where the relevant intermediary cannot transmit the information to which the relevant instruction relates directly to the traded PLC in accordance with the relevant instruction, and the intermediary is part of a chain of intermediaries, the relevant intermediary shall, as soon as practicable, transmit the relevant instruction to each other intermediary in the chain of intermediaries known to the relevant intermediary as being part of the chain.
(c) An intermediary to whom the relevant instruction is transmitted under paragraph (b), and who can transmit the information to which the relevant instruction relates directly to the traded PLC, shall, as soon as practicable and in accordance with the relevant instruction, transmit that information directly to the traded PLC.
(5) A shareholder in a traded PLC may nominate a third party to be the person to receive information or notifications under this section on the shareholder’s behalf and, accordingly, references in this section to ‘shareholder’ shall be construed as including any such third party.
(6) In this section, ‘relevant information’ means, as appropriate, the information referred to in paragraph (a), or the notice referred to in paragraph (b), of subsection (1).
(7) This section shall come into operation on 3 September 2020.
Facilitation of exercise of shareholder rights
1110D. (1) Where an intermediary provides services to a shareholder in relation to shares, the intermediary shall facilitate the exercise of the shareholder’s rights by –
(a) making the necessary arrangements for the shareholder to exercise the rights attaching to the shareholder’s shares, or
(b) exercising the rights attaching to the shareholder’s shares upon the explicit authorisation and instruction of the shareholder, and for the shareholder’s benefit.
(2) When votes in a general meeting of a traded PLC are cast electronically, the traded PLC shall send, as soon as practicable, to each person who has cast such a vote, an electronic confirmation of receipt of the vote.
(3) (a) Subject to paragraph (b), where a shareholder’s vote has been validly recorded and counted at a general meeting of a traded PLC, the traded PLC shall, upon request by the shareholder, provide the shareholder with a confirmation that the vote has been validly recorded and counted.
(b) Paragraph (a) shall not apply where information on whether or not a vote cast at a general meeting has been validly recorded and counted by the traded PLC is otherwise available to the person casting the vote or to the person on whose behalf the vote was cast, as the case may be.
(4) Subject to subsection (5), where an intermediary receives a confirmation under subsection (2) or (3), the intermediary shall, as soon as practicable, transmit the confirmation to the shareholder to whom the confirmation relates.
(5) (a) Subject to paragraph (b), an intermediary (in this subsection referred to as a ‘relevant intermediary’) who is provided with a confirmation under subsection (2) or (3) (in this subsection referred to as the ‘relevant confirmation’), shall, as soon as practicable, transmit the relevant confirmation to the shareholder to whom it relates.
(b) Where –
(i) it is not possible for the relevant intermediary to transmit the relevant confirmation directly to the shareholder to whom it relates, and
(ii) the relevant intermediary is part of a chain of intermediaries,
the relevant intermediary shall, as soon as practicable, transmit the relevant confirmation to each other intermediary in the chain of intermediaries known to the relevant intermediary as being part of the chain.
(c) An intermediary to whom a relevant confirmation is transmitted under paragraph (b) and who can transmit the relevant confirmation directly to the shareholder to whom it relates shall, as soon as practicable, transmit the relevant confirmation directly to that shareholder.
(6) A shareholder in a traded PLC may nominate a third party to exercise rights, make requests, receive confirmations and carry out any other functions under this section on the shareholder’s behalf, and, accordingly, references in this section to ‘shareholder’ shall be construed as including any such third party.
(7) This section shall come into operation on 3 September 2020.
Non-discrimination, proportionality and transparency of costs
1110E. (1) Where an intermediary charges a fee for providing a service under this Chapter, the intermediary shall publicly disclose the fee charged for such service.
(2) Subject to subsection (3), where an intermediary charges a shareholder, traded PLC or intermediary a fee for providing a service under this Chapter, the first-mentioned intermediary shall not charge a different fee for providing the service on a cross-border basis than the fee it charges for providing that service in the State.
(3) An intermediary may charge a different fee for providing a service on a cross-border basis than the fee it charges for providing the service in the State where the difference between the fees charged –
(a) is duly justified, and
(b) reflects the difference between –
(i) the actual costs incurred by the intermediary in providing the service on a cross-border basis, and
(ii) the actual costs incurred by the intermediary in providing the service in the State.
CHAPTER 8B
Transparency of institutional investors, asset managers and proxy advisors
Interpretation and application (Chapter 8B)
1110F. (1) In this Chapter –
‘engagement activity’ means any activity, action, plan or document that is carried out or made for the purpose of giving effect to an engagement policy;
‘relevant asset manager’ means an asset manager –
(a) that invests in shares traded on a regulated market on behalf of investors, and
(b) in respect of which the competent Member State, within the meaning of Article 1(2)(a) of the Shareholders’ Rights Directive, is the State;
‘relevant institutional investor’ means an institutional investor –
(a) that invests, whether directly or through an asset manager, in shares traded on a regulated market, and
(b) in respect of which the competent Member State, within the meaning of Article 1(2)(a) of the Shareholders’ Rights Directive, is the State.
(2) A word or expression that is used in this Chapter and is also used in the Shareholders’ Rights Directive has, unless the context otherwise requires, the same meaning in this Chapter as it has in that Directive.
Engagement policy – institutional investors
1110G. (1) Subject to subsection (2), a relevant institutional investor shall develop and publicly disclose an engagement policy in accordance with this section.
(2) Where a relevant institutional investor does not develop and publicly disclose an engagement policy in accordance with this section, the relevant institutional investor shall publicly disclose a clear and reasoned explanation for its failure to do so.
(3) The engagement policy developed under subsection (1) shall describe how the relevant institutional investor –
(a) integrates shareholder engagement in its investment strategy,
(b) monitors investee companies on relevant matters, including strategy, financial and non-financial performance and risk, capital structure, social and environmental impact and corporate governance,
(c) conducts dialogues with investee companies,
(d) exercises voting rights and other rights attached to shares,
(e) cooperates with other shareholders,
(f) communicates with relevant stakeholders of the investee companies, and
(g) manages actual and potential conflicts of interest in relation to its engagement.
(4) Subject to subsections (5) and (6), a relevant institutional investor that has developed an engagement policy in accordance with this section shall, on an annual basis, publicly disclose how its engagement policy has been implemented, in a manner that includes –
(a) a general description of voting behaviour,
(b) an explanation of the most significant votes taken,
(c) information on the use, if any, of the services of proxy advisors, and
(d) information on how it has cast votes in the general meetings of companies in which it holds shares.
(5) A disclosure under subsection (4) may exclude information regarding votes that are insignificant due to the subject matter of the vote or the size of the holding in the company in question.
(6) Where a relevant institutional investor does not, in a given year, publicly disclose how its engagement policy has been implemented in accordance with subsection (4), the relevant institutional investor shall publicly disclose a clear and reasoned explanation for its failure to do so.
(7) (a) Rules that apply to a relevant institutional investor regarding conflicts of interest shall also apply to a relevant institutional investor regarding the engagement activities.
(b) For the purposes of paragraph (a), rules that apply to a relevant institutional investor regarding conflicts of interest include the following:
(i) Article 14 of Directive 2011/61/EU of the European Parliament and the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No. 1060/2009 and (EU) No. 1095/20106 ;
(ii) Articles 12(1)(b) and 14(1)(d) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)5 , and the relevant implementing rules and technical standards under that Directive;
(iii) Article 23 of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast)2 .
(8) Where an asset manager implements an engagement policy on behalf of a relevant institutional investor, and such implementation involves the casting of a vote by that asset manager on behalf of the relevant institutional investor, the relevant institutional investor shall publicly disclose where the asset manager has published information regarding the casting of that vote.
(9) A requirement in this section to publicly disclose any matter shall be read as a requirement to make the matter available free of charge on the website of the relevant institutional investor that is subject to the requirement.
Engagement policy – asset managers
1110H. (1) Subject to subsection (2), a relevant asset manager shall develop and publicly disclose an engagement policy in accordance with this section.
(2) A relevant asset manager who does not develop and publicly disclose an engagement policy in accordance with this section shall publicly disclose a clear and reasoned explanation for its failure to do so.
(3) The engagement policy developed under subsection (1) shall describe how the relevant asset manager –
(a) integrates shareholder engagement in its investment strategy,
(b) monitors investee companies on relevant matters, including strategy, financial and non-financial performance and risk, capital structure, social and environmental impact and corporate governance,
(c) conducts dialogues with investee companies,
(d) exercises voting rights and other rights attached to shares,
(e) cooperates with other shareholders,
(f) communicates with relevant stakeholders of the investee companies, and
(g) manages actual and potential conflicts of interest in relation to its engagement.
(4) Subject to subsections (5) and (6), a relevant asset manager that has developed an engagement policy in accordance with this section shall, on an annual basis, publicly disclose how its engagement policy has been implemented, in a manner that includes –
(a) a general description of voting behaviour,
(b) an explanation of the most significant votes taken,
(c) information on the use, if any, of the services of proxy advisors, and
(d) information on how it has cast votes in the general meetings of companies in which it holds shares.
(5) A disclosure under subsection (4) may exclude information regarding votes that are insignificant due to the subject matter of the vote or the size of the holding in the company in question.
(6) Where a relevant asset manager does not, in a given year, publicly disclose how its engagement policy has been implemented in accordance with subsection (4), the relevant asset manager shall publicly disclose a clear and reasoned explanation for its failure to do so.
(7) (a) Rules that apply to a relevant asset manager regarding conflicts of interest shall also apply to a relevant asset manager regarding the engagement activities.
(b) For the purposes of paragraph (a), rules that apply to a relevant asset manager regarding conflicts of interest include the following:
(i) Article 14 of Directive 2011/61/EU of the European Parliament and the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No. 1060/2009 and (EU) No. 1095/20106 ;
(ii) Article 12(1)(b) and 14(1)(d) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)5 , and the relevant implementing rules and technical standards under that Directive;
(iii) Article 23 of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast)2 .
(8) A requirement in this section to publicly disclose any matter shall be read as a requirement to make the matter available free of charge on the website of the relevant asset manager that is subject to the requirement.
Investment strategy of institutional investors and arrangements with asset managers
1110I. (1) A relevant institutional investor shall publicly disclose how the main elements of its equity investment strategy are consistent with the profile and duration of its liabilities, in particular its long-term liabilities, and such disclosure shall include how those elements contribute to the medium to long-term performance of its assets.
(2) Where an asset manager invests on behalf of a relevant institutional investor, whether on a discretionary client-by-client basis or through a collective investment undertaking, the relevant institutional investor shall publicly disclose the following information regarding its arrangement with the asset manager:
(a) how that arrangement incentivises the asset manager to align its investment strategy and decisions with the profile and duration of the liabilities of the relevant institutional investor, in particular long-term liabilities;
(b) how that arrangement incentivises the asset manager to –
(i) make investment decisions based on assessments about the medium to long-term financial and non-financial performance of the investee company, and
(ii) engage with investee companies in order to improve their performance in the medium to long term;
(c) how the method and time horizon of the evaluation of the asset manager’s performance and the remuneration for asset management services –
(i) are in line with the profile and duration of the liabilities of the relevant institutional investor, in particular the long-term liabilities, and
(ii) take absolute long-term performance into account;
(d) how the relevant institutional investor monitors portfolio turnover costs incurred by the asset manager and how it defines and monitors a targeted portfolio turnover or turnover range;
(e) the duration of the arrangement with the asset manager.
(3) Where the public disclosure under subsection (2) does not contain all of the elements specified in paragraphs (a) to (e) of that subsection, the relevant institutional investor shall publicly disclose a clear and reasoned explanation as to why such elements are not included.
(4) A requirement in this section to publicly disclose any matter shall be read as a requirement to –
(a) make the matter available free of charge on the website of the person that is subject to the requirement, and
(b) update the matter on an annual basis, unless there is no material change to the matter since it was last updated.
(5) An institutional investor that is regulated by Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast)11 may include the information referred to in subsections (1) and (2) in its report on solvency and financial condition under Chapter 3 of Part 4 of the European Union (Insurance and Reinsurance) Regulations 2015 ( S.I. No. 485 of 2015 ).
Transparency of asset managers
1110J. (1) Subject to subsection (4), where an asset manager that is a relevant asset manager has entered into an arrangement referred to in section 1110I(2), with an institutional investor, to invest on the institutional investor’s behalf, the relevant asset manager shall disclose, on an annual basis and complying with subsections (2) and (3), to the institutional investor how its investment strategy and implementation thereof –
(a) complies with that arrangement, and
(b) contributes to the medium to long-term performance of the assets of the institutional investor or of a fund managed by the institutional investor.
(2) The disclosure referred to in subsection (1) shall include reporting on –
(a) the key material medium to long-term risks associated with the investments,
(b) portfolio composition,
(c) turnover and turnover costs,
(d) the use of proxy advisors for the purpose of engagement activities, and
(e) the asset manager’s policy on securities lending and how it is applied to engagement activities, if applicable, particularly at the time of the general meeting of the investee companies.
(3) The disclosure referred to in subsection (1) shall also include information on –
(a) whether and, if so, how the relevant asset manager makes investments decisions based on its evaluation of medium to long-term performance of the investee company, including non-financial performance, and
(b) whether and, if so, which conflicts of interest have arisen in connection with engagement activities and how the asset manager has dealt with them.
(4) Where the information to be disclosed in accordance with subsections (1) to (3) is publicly available, the relevant asset manager shall not be required to provide that information to the institutional investor directly.
Transparency of proxy advisors
1110K. (1) Where a relevant proxy advisor applies a code of conduct, it shall publicly disclose, on an annual basis –
(a) a reference to the code of conduct, and
(b) a report on its application of the code of conduct.
(2) Where a relevant proxy advisor does not apply a code of conduct, the relevant proxy advisor shall, on an annual basis, publicly disclose a clear and reasoned explanation for its failure to do so.
(3) Where a relevant proxy advisor applies a code of conduct but departs from it, the relevant proxy advisor shall publicly disclose, on an annual basis –
(a) the ways in which the code of conduct was departed from,
(b) an explanation for the departure from the code of conduct, and
(c) any alternative measures adopted by the relevant proxy advisor.
(4) (a) Subject to paragraph (c), a relevant proxy advisor shall publicly disclose the following information in relation to the preparation of its research, advice and voting recommendations:
(i) the essential features of the methodologies and models applied;
(ii) the main information sources used;
(iii) the procedures put in place to ensure the quality of the research, advice and voting recommendations and qualifications of the staff involved;
(iv) whether and, if so, how the relevant proxy advisor took national market, legal, regulatory and company-specific conditions into account;
(v) the essential features of the voting policies applied for each market;
(vi) whether the relevant proxy advisor has dialogues with the companies, and the stakeholders of the companies, which are the object of the relevant proxy advisor’s research, advice or voting recommendations and the extent and nature of those dialogues;
(vii) the policy regarding the prevention and management of potential conflicts of interest.
(b) The information specified in this subsection shall be made publicly available throughout a period of at least 3 years from the date of publication.
(c) Where the information specified in this subsection forms part of a public disclosure under subsections (1) to (3), the relevant proxy advisor may elect not to disclose that information separately under this subsection.
(5) A relevant proxy advisor shall identify and, as soon as practicable, disclose to its clients –
(a) any actual or potential conflicts of interest or business relationships that may influence the preparation of the relevant proxy advisor’s research, advice or voting recommendations, and
(b) the actions the relevant proxy advisor has undertaken to eliminate, mitigate or manage the actual or potential conflicts of interest.
(6) A requirement in this section to publicly disclose any matter shall be read as a requirement to make the matter available free of charge on the website of the relevant proxy advisor that is subject to the requirement.
(7) In this section, ‘relevant proxy advisor’ means a proxy advisor –
(a) that provides services to shareholders with respect to shares that are admitted to trading on a regulated market in any Member State, and
(b) in respect of which the competent Member State, within the meaning of Article 1(2)(b) of the Shareholders’ Rights Directive, is the State.
CHAPTER 8C
Remuneration policy, remuneration report and transparency and approval of related party transactions
Interpretation and application (Chapter 8C)
1110L. (1) In this Chapter and Schedule 21 –
‘General Data Protection Regulation’ means Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation)7 ;
‘personal data’ has the meaning assigned to it in the General Data Protection Regulation;
‘special categories of personal data’ has the meaning assigned to it in the General Data Protection Regulation;
‘traded PLC’ has the meaning assigned to it by section 1099(4).
(2) A word or expression that is used in this Chapter and is also used in the Shareholders’ Rights Directive has, unless the context otherwise requires, the same meaning in this Chapter as it has in that Directive.
Right to vote on remuneration policy
1110M. (1) A traded PLC shall –
(a) prepare a policy regarding the remuneration of its directors in accordance with subsection (6) (in this section referred to as a ‘remuneration policy’), and
(b) cause a vote on the remuneration policy (in this section referred to as a ‘remuneration vote’) to be held at a general meeting of the traded PLC.
(2) Subject to any provision of the traded PLC’s constitution making a remuneration vote binding on the traded PLC (in this section referred to as a ‘binding vote’), a remuneration vote shall be advisory (in this section referred to as an ‘advisory vote’).
(3) (a) Subject to subsection (8), where a remuneration policy is approved by a binding vote, the traded PLC shall pay remuneration to its directors in accordance with the remuneration policy to which that vote related.
(b) Where a binding vote is held on a remuneration policy, and the remuneration policy is not approved by that vote, the traded PLC shall –
(i) prepare a revised remuneration policy and cause a remuneration vote to be held in respect of the revised remuneration policy at the following general meeting, and
(ii) subject to subsection (8), until such time as the remuneration vote referred to in subparagraph (i) is held –
(I) where the traded PLC has previously approved a remuneration policy by a binding vote, pay its directors in accordance with that remuneration policy, or
(II) where the traded PLC has not previously approved a remuneration policy by a binding vote, pay its directors in accordance with its existing practices.
(4) (a) Subject to subsection (8), following an advisory vote, and regardless of the outcome of the vote, a traded PLC shall pay its directors in accordance with –
(i) the remuneration policy to which that vote related, or
(ii) a remuneration policy that has previously been approved by a remuneration vote.
(b) Where an advisory vote is held on a remuneration policy, and the remuneration policy is not approved by that vote, the traded PLC shall prepare a revised remuneration policy and hold a remuneration vote in respect of that revised policy at the following general meeting.
(5) (a) Subject to paragraph (b) of subsection (4), and paragraphs (b) and (c), a traded PLC shall hold a remuneration vote at least once every 4 years.
(b) Where, on or before the date on which the European Union (Shareholders’ Rights) Regulations 2020 come into operation, a traded PLC has –
(i) prepared a policy regarding the remuneration of its directors, regardless of whether or not that policy complies with the requirements of subsection (6), and
(ii) approved the policy referred to in paragraph (i) in general meeting of the traded PLC, the traded PLC shall not be required to hold a remuneration vote until a period of 4 years has elapsed from the date on which the approval mentioned in subparagraph (ii) was given.
(c) Notwithstanding any provision of this subsection, a traded PLC shall cause a remuneration vote to be held in respect of every material change to the traded PLC’s remuneration policy, or to a policy referred to in paragraph (b).
(6) The remuneration policy shall –
(a) explain how it contributes to the traded PLC’s business strategy and long-term interests and sustainability,
(b) be clear and understandable,
(c) describe the different components of fixed and variable remuneration, including all bonuses and other benefits in whatever form, which can be awarded to directors, and indicate their relative proportion,
(d) explain how, if at all, the pay and employment conditions of employees of the traded PLC were taken into account when establishing the remuneration policy,
(e) set clear, comprehensive and varied criteria for the award of variable remuneration awarded by the traded PLC, if any,
(f) specify information on any deferral periods and on the possibility for the traded PLC to reclaim the variable remuneration referred to in paragraph (e),
(g) indicate financial and non-financial performance criteria, including, where appropriate, criteria relating to corporate social responsibility, and explain how they contribute to the traded PLC’s business strategy and long-term interests and sustainability,
(h) indicate the methods applied, or to be applied, to determine the extent to which the performance criteria referred to in paragraph (g) have been fulfilled,
(i) where the traded PLC awards remuneration in the form of, or based on, shares, specify vesting periods and, where applicable, retention of shares after vesting and explain how the share-based remuneration contributes to the traded PLC’s business strategy and long-term interests and sustainability,
(j) indicate the duration of the contracts or arrangements with directors and the applicable notice periods, the main characteristics of supplementary pension or early retirement schemes and the terms of the termination and payments linked to termination,
(k) explain the decision-making process followed for its determination, review and implementation, including measures to avoid or manage conflicts of interest and, where applicable, the role of a remuneration committee or other committees concerned,
(l) describe and explain all significant changes, if any, as against the traded PLC’s previous remuneration policy,
(m) describe and explain how the remuneration policy takes into account –
(i) the votes and views of shareholders on the policy, and
(ii) any remuneration reports since the most recent vote on the remuneration policy, and
(n) set out the elements, if any, of the policy from which the traded PLC may derogate in accordance with subsection (8), and the procedural conditions required for such a derogation.
(7) (a) A traded PLC shall, as soon as practicable after the holding of a remuneration vote, publish on its website, free of charge –
(i) the remuneration policy to which the vote related,
(ii) the date of the remuneration vote, and
(iii) the results of the remuneration vote in accordance with section 1110.
(b) Where a remuneration policy is approved by a remuneration vote, the traded PLC shall maintain the information published under paragraph (a) on its website, free of charge, for as long as the remuneration policy to which the vote related is applicable.
(8) Notwithstanding any other provision of this section, a traded PLC may temporarily derogate from its remuneration policy where –
(a) doing so is necessary in exceptional circumstances, to serve the long-term interests and sustainability of the traded PLC as a whole or to assure its viability, and
(b) the derogation is in accordance with the procedural conditions and other provisions on derogation set out in the remuneration policy.
(9) In this section, a reference to ‘director’ includes, in addition to the meaning assigned to that expression by section 2(1), a reference to –
(a) a chief executive officer of a traded PLC, and
(b) a deputy chief executive officer of a traded PLC,
where such positions exist in relation to a traded PLC and by whatever name called.
(10) This section applies, in so far as it relates to a traded PLC, to the traded PLC’s financial years commencing on or after 10 June 2019.
Remuneration report
1110N. (1) A traded PLC shall prepare a report in accordance with this section providing a comprehensive overview of the remuneration awarded or due, during the most recent financial year, to all of its directors in accordance with a remuneration policy prepared under section 1110M (referred to in this section as a ‘remuneration report’).
(2) The remuneration report shall be clear and understandable and, where applicable, contain the following information regarding each director’s remuneration:
(a) the total remuneration broken down into its various components;
(b) the relative proportion of fixed and variable remuneration;
(c) an explanation of how the total remuneration complies with the adopted remuneration policy, including how it contributes to the long-term performance of the traded PLC;
(d) information on the application of performance criteria;
(e) the annual change of –
(i) remuneration,
(ii) the performance of the traded PLC, and
(iii) average remuneration, on a full-time equivalent basis, of employees of the traded PLC other than directors over the 5 most recent financial years since the coming into operation of the European Union (Shareholders’ Rights) Regulations 2020, or the 5 most recent financial years in respect of which such information is available, presented together in a manner which permits comparison;
(f) any remuneration from any undertaking belonging to the same group, as defined in section 274(1);
(g) the number of shares and share options granted or offered, as well as the main conditions for the exercise of the rights including the exercise price and date and any change thereof;
(h) information on the use of the possibility to reclaim variable remuneration;
(i) information on any deviations from the procedure for the implementation of the remuneration policy referred to in section 1110M;
(j) information on any derogations from the remuneration policy availed of under section 1110M(8), including an explanation of the exceptional circumstances in question and an indication of the specific elements derogated from.
(3) A traded PLC shall not include in the remuneration report –
(a) special categories of personal data of individual directors, or
(b) personal data relating to the family situation of individual directors.
(4) Subject to subsection (5), a traded PLC may process the personal data of directors, which are included in the remuneration report in accordance with this section, for the purpose of increasing corporate transparency as regards directors’ remuneration with a view to enhancing directors’ accountability and shareholder oversight over directors’ remuneration.
(5) Without prejudice to any longer period laid down by any applicable provision of European Union law, a traded PLC shall not make the personal data of directors included in a remuneration report pursuant to subsection (4) publicly available after a period of 10 years from the publication of the remuneration report has expired.
(6) A traded PLC shall cause a vote to be held in general meeting on the remuneration report prepared in respect of the most recent financial year.
(7) When a vote is held under subsection (6), the traded PLC shall explain in the first remuneration report prepared after the vote how that vote has been taken into account.
(8) (a) Subject to paragraph (b), after a general meeting at which a vote under subsection (6) is held, the traded PLC shall make the remuneration report to which the vote related publicly available on its website, free of charge, for a period of 10 years.
(b) A traded PLC may keep the remuneration report publicly available on its website for a period longer than 10 years provided that the report does not contain the personal data of directors.
(9) The statutory auditors of a traded PLC, when preparing the report required by section 391 in respect of the traded PLC, shall ascertain whether the traded PLC has, in respect of the financial year immediately preceding the financial year that is the subject of the report, provided the information required under this section and, where the traded PLC has not provided the information required by this section, the statutory auditors shall state that fact in the report.
(10) (a) The directors of a traded PLC shall ensure that the remuneration report is prepared and published in accordance with this section.
(b) Notwithstanding section 1110L(2), in this subsection ‘directors’ shall be interpreted in accordance with section 2(1).
(11) In this section –
(a) other than in subsection (10), a reference to ‘director’ includes, in addition to the meaning assigned to that expression by section 2(1), a reference to –
(i) a former director,
(ii) a chief executive officer, where such a position exists in relation to a traded PLC and by whatever name called, and
(iii) a deputy chief executive officer, where such a position exists in relation to a traded PLC and by whatever name called, and
(b) a reference to ‘remuneration awarded or due’ includes a reference to all benefits in whatever form awarded or due.
(12) This section, in so far as it relates to a traded PLC, applies to the traded PLC’s financial years commencing on or after 10 June 2019.
Transparency and approval of related party transactions
1110O. (1) Subject to subsection (5), when entering into a material transaction with a related party, a traded PLC shall publicly announce the transaction no later than at the conclusion of the transaction.
(2) An announcement under subsection (1) shall contain –
(a) information on the nature of the related party relationship,
(b) the name of the related party,
(c) the date and the value of the transaction, and
(d) any other information necessary to assess whether or not the transaction is fair and reasonable from the perspective of the traded PLC and of the shareholders who are not a related party, including minority shareholders.
(3) (a) Subject to subsections (4) and (5), a traded PLC shall not enter into a material transaction with a related party without the transaction being approved, prior to the conclusion of the transaction, by a resolution of the traded PLC in general meeting.
(b) A traded PLC shall ensure that the approval under paragraph (a) is carried out in a way that –
(i) prevents the related party from taking advantage of its position, and
(ii) provides adequate protection for the interests of the traded PLC and of any shareholder who is not a related party, including minority shareholders.
(4) Where a related party transaction entered into, or to be entered into, by a traded PLC involves a shareholder of the traded PLC, that shareholder shall not take part in the approval referred to in subsection (3).
(5) (a) Subsections (1) to (3) shall not apply to –
(i) a transaction entered into in the ordinary course of business and concluded on normal market terms,
(ii) transactions entered into between a traded PLC and its subsidiary, or a number of its subsidiaries, provided that –
(I) the subsidiary or subsidiaries are wholly owned by the traded PLC, or
(II) no related party of the traded PLC has an interest in the subsidiary or subsidiaries, as the case may be,
(iii) transactions regarding remuneration of directors, or certain elements of remuneration of directors, awarded or due in accordance with section 1110M, or
(iv) transactions offered to all shareholders on the same terms where equal treatment of all shareholders and protection of the interests of the traded PLC are ensured.
(b) In subparagraph (iii) of paragraph (a), ‘director’ has the same meaning as it has in section 1110M.
(6) (a) The directors of a traded PLC shall, as soon as practicable, establish an internal procedure to assess whether or not transactions are entered into in the ordinary course of business and concluded on normal market terms for the purposes of paragraph (5)(a)(i).
(b) A related party shall not take part in an assessment under this subsection.
(c) Notwithstanding section 1110L(2), in this subsection ‘directors’ shall be interpreted in accordance with section 2(1).
(7) When a related party of a traded PLC enters into a material transaction with a subsidiary of that traded PLC, the traded PLC shall publicly announce the material transaction no later than at the conclusion of the transaction.
(8) A traded PLC shall ensure that all transactions with the same related party that have been concluded –
(a) in any 12-month period, or
(b) in the same financial year,
are aggregated for the purposes of assessing if the transactions, when aggregated, constitute a material transaction.
(9) This section is without prejudice to the rules on public disclosure of inside information as referred to in Article 17 of Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC12 .
(10) This section is in addition to, and not in substitution for, the provisions of this Act, or the general law, that constrain, in certain circumstances, dealings in property of a company and that provide for remedies in certain cases where those constraints are not observed.
(11) In this section –
‘class test’ means any one of the 4 tests set out in Schedule 21;
‘material transaction’ means a transaction in which any percentage ratio, calculated in accordance with one or more class tests, is 5% or more;
‘percentage ratio’ means, in relation to a transaction, a figure, expressed as a percentage, that results from applying a calculation under a class test to the transaction;
‘related party transaction’ means a transaction between a traded PLC and its related party.
CHAPTER 8D
Offences and penalties
Offences and penalties
1110P. (1) Where a person fails to comply with any of the following provisions, that person and, where that person is a company, the company and any officer of it who is in default, shall be guilty of a category 3 offence:
(a) subsection (3) or (4) of section 1103 (subject to subsection (2));
(b) subsection (3) of section 1110;
(c) subsection (2), (3) or (5) of section 1110B;
(d) subsection (1), (2) or (4) of section 1110C;
(e) subsection (1), (2), (3), (4) or (5) of section 1110D;
(f) subsection (1) or (2) of section 1110E;
(g) subsection (2), (6) or (8) of section 1110G;
(h) subsection (2) or (6) of section 1110H;
(i) subsection (1), (2) or (3) of section 1110I;
(j) subsection (1) of section 1110J;
(k) subsection (2), (3), (4) or (5) of section 1110K;
(l) subsection (1), (3), (4), (5)(a) or (c) or (7) of section 1110M;
(m) subsection (1), (6), (7) or (8) of section 1110N;
(n) subsection (1), (2), (3), (4), (7) or (8) of section 1110O.
(2) A person who fails to comply with paragraph (3)(e) of section 1103 does not commit an offence where that person has complied with subsection (5) of that section.”.
Amendment of Principal Act – insertion of Schedule 21
8. The Principal Act is amended by the insertion of the text set out in the Schedule as Schedule 21 to that Act.
SCHEDULE
“Schedule 21
Section 1110O
Class tests
Gross Assets Test
1. (1) The gross assets test is calculated by dividing the gross assets the subject of a transaction by the gross assets of the traded PLC entering into the transaction.
(2) The gross assets of the traded PLC means the total non-current assets, plus the total current assets, of the traded PLC.
(3) For –
(a) an acquisition of an interest in an undertaking which will result in consolidation of the gross assets of that undertaking in the financial statements of the traded PLC, or
(b) a disposal of an interest in an undertaking which will result in the assets of that undertaking no longer being consolidated in the financial statements of the traded PLC,
the gross assets the subject of the transaction means the value of 100% of that undertaking’s assets irrespective of what interest is acquired or disposed of.
(4) For an acquisition or disposal of an interest in an undertaking which does not fall within paragraph (3), the gross assets the subject of the transaction means –
(a) for an acquisition, the consideration together with liabilities assumed, if any, and
(b) for a disposal, the assets attributed to that interest in the traded PLC’s accounts.
(5) If there is an acquisition of assets other than an interest in an undertaking, the assets the subject of the transaction means the consideration or, if greater, the book value of those assets as they will be included in the traded PLC’s financial statements.
Profits Test
2. (1) The profits test is calculated by dividing the profits attributable to the assets which are the subject of the transaction by the profits of the traded PLC.
(2) For the purposes of paragraph (1), profits means –
(a) profits after deducting all charges except taxation, and
(b) for an acquisition or disposal of an interest in an undertaking referred to in paragraphs 1(3)(a) or (b), 100% of the profits of the undertaking (irrespective of what interest is acquired or disposed of).
(3) In calculating the profits test, the losses of the traded PLC or target undertaking shall be included.
Consideration Test
3. (1) The consideration test is calculated by taking the consideration for the transaction as a percentage of the aggregate market value of all the ordinary shares (excluding treasury shares) of the traded PLC.
(2) For the purposes of paragraph (1) –
(a) the consideration is the amount paid to the contracting party,
(b) if all or part of the consideration is in the form of securities to be traded on a market, the consideration attributable to those securities is the aggregate market value of those securities, and
(c) if deferred consideration is or may be payable or receivable by the traded PLC in the future, the consideration is the maximum total consideration payable or receivable under the agreement.
(3) For the purposes of paragraph (2)(b) the figures used to determine consideration consisting of –
(a) securities of a class already listed, shall be the aggregate market value of all those securities on the last business day before the announcement under section 1110O(1), and
(b) a new class of securities for which an application for listing will be made, shall be the expected aggregate market value of all those securities.
(4) For the purposes of paragraph (1), the figure used to determine aggregate market value is the aggregate market value of all the ordinary shares (excluding treasury shares) of the traded PLC at the close of business on the last business day immediately before the announcement under section 1110O(1).
Gross Capital Test
4. (1) The gross capital test is calculated by dividing the gross capital of the undertaking being acquired by the gross capital of the traded PLC.
(2) For the purposes of paragraph (1), the gross capital of the company or business being acquired means the aggregate of –
(a) the consideration (as calculated under the Consideration Test),
(b) if a company, any of its shares and debt securities which are not being acquired,
(c) all other liabilities (other than current liabilities) including minority interests and deferred taxation, and
(d) any excess of current liabilities over current assets.
(3) For the purposes of paragraph (1) the gross capital of the traded PLC means the aggregate of –
(a) the market value of its shares (excluding treasury shares) and the issue amount of the debt security,
(b) all other liabilities (other than current liabilities) including minority interests and deferred taxation, and
(c) any excess of current liabilities over current assets.
(4) For the purposes of paragraph (1) –
(a) figures used must be, for shares and debt security aggregated for the purposes of the gross capital percentage ratio, the aggregate market value of all those shares (or if not available before the announcement, their nominal value) and the issue amount of the debt security, and
(b) for shares and debt security aggregated for the purposes of paragraph (3)(b) above, any treasury shares held by the company are not to be taken into account.”.
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GIVEN under the Official Seal of the Minister Business, Enterprise and Innovation,
13 March, 2020.
HEATHER HUMPHREYS,
Minister for Business, Enterprise and Innovation.
EXPLANATORY NOTE
(This is not a part of the Instrument and does not purport to be a legal interpretation.)
These Regulations give effect to the provisions of Directive EU 2017/828 of the European Parliament and of the Council of 17 May 2017 amending Directive 2007/36/EC as regards the encouragement of long-term shareholder engagement. The Regulations insert several Chapters into Part 17 of the Companies Act 2014 dealing with the subject matter of the Directive. Certain provisions relate to transparency requirements for institutional investors, asset managers, and proxy advisors.
1 OJ No. L 132, 20.5.2017, p.1
2 OJ No. L 173, 12.6.2014, p. 349
3 OJ No. L 184, 14.7.2007, p. 17
4 OJ No. L 173, 12.6.2014, p.190
1 OJ No. L 132, 20.5.2017, p.1
5 OJ No. L 302, 17.11.2009, p. 32
6 OJ No. L 174, 1.7.2011, p. 1
7 OJ No. L 119, 4.5.2016, p.1
8 OJ No. L 176, 27.6.2013, p. 1
9 OJ No. L 257, 28.8.2014, p. 1
10 OJ No. L 223, 4.9.2018, p. 1
6 OJ No. L 174, 1.7.2011, p. 1
5 OJ No. L 302, 17.11.2009, p. 32
2 OJ No. L 173, 12.6.2014, p. 349
6 OJ No. L 174, 1.7.2011, p. 1
5 OJ No. L 302, 17.11.2009, p. 32
2 OJ No. L 173, 12.6.2014, p. 349
11 OJ No. L 335, 17.12.2009, p. 1
7 OJ No. L 119, 4.5.2016, p.1
12 OJ No. L 173, 12.6.2014, p.1