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REPORT (COM(2022)0761 – C90416/2022 – 2022/0406(COD))

On the proposal for a directive of the European Parliament and of the Council on multiple-vote share structures in companies that seek the admission to trading of their shares on an SME growth market

A-9-2023-0300

Committee on Economic and Monetary Affairs · Rapporteur: Alfred Sant

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Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's amended version of a proposed directive on multiple-vote share structures in companies seeking admission to trading on an SME growth market, a regulated market or any other multilateral trading facility. It requires member states to let companies without listed shares adopt multiple-vote share structures and not to block their admission to trading for that reason. It sets safeguards: a maximum voting ratio of one-to-two to one-to-twelve, a cap on multiple-vote shares in the share capital, qualified-majority decisions and separate class votes. It requires transparency: a stock name ending in 'WVR', and disclosure of the share structure, restrictions and the identity of multiple-vote shareholders in the prospectus and annual financial report. The Commission must review the directive three years after transposition and every three years thereafter, and member states must transpose it within 12 months of entry into force.

Committee position. The Committee on Economic and Monetary Affairs adopts Parliament's first-reading position, amending the Commission proposal to require member states to allow multiple-vote share structures with safeguards, transparency and a review clause.

Key points

  1. Member states must give companies without listed shares the right to adopt multiple-vote share structures for admission to trading on a regulated market, an SME growth market or any other MTF.
  2. Member states may not prevent admission to trading on the ground that a company has adopted a multiple-vote share structure, and may allow adoption before seeking admission.
  3. Member states may make the exercise of enhanced voting rights conditional on admission to trading; until then multiple-vote shares carry the same voting rights as other classes.
  4. A company's decision to adopt or modify a multiple-vote share structure must be taken by the general meeting by at least a qualified majority of votes cast, with a separate vote in each affected class.
  5. Member states must require safeguards: a maximum voting ratio from one-to-two to one-to-twelve and a limit on the share of outstanding capital multiple-vote shares may represent.
  6. Qualified-majority decisions, excluding appointment and dismissal of directors and operational decisions, must also meet a qualified majority of share capital or shares represented, or a separate class vote.
  7. Enhanced voting rights of multiple-vote shares must be excluded on shareholder-tabled resolutions, in particular on the company's impact on human rights and the environment.
  8. Member states may add safeguards such as transfer-based, time-based or event-based sunset clauses, and may bar enhanced voting rights on executive remuneration, dividend policy or related-party transactions.
  9. Companies with multiple-vote share structures must disclose detailed information on their capital structure, transfer and voting restrictions, special control rights and the identity of multiple-vote shareholders.
  10. Where holders are natural persons, only their names need be disclosed; companies must have a stock name ending with the marker 'WVR'.
  11. National authorities, regulated markets, SME growth markets and MTFs must promote investor understanding of the WVR marker and its impact on voting rights.
  12. The Commission must report on implementation and effects three years after transposition and every three years thereafter; member states must transpose the directive within 12 months of entry into force.

Who is affected

  • Companies without listed shares seeking admission to trading on a regulated market, an SME growth market or any other MTF.
  • Controlling shareholders, who can retain decision-making power while raising funds from the public.
  • Shareholders without multiple-vote shares, who gain safeguards and disclosure rights.
  • Member states, which must transpose the rules and may add further safeguards.
  • National competent authorities, regulated markets, SME growth markets and MTFs, which must promote understanding of the WVR marker.

Figures and deadlines

  • Maximum voting ratio ranging from one-to-two to one-to-twelve.
  • SMEs must constitute at least 50 % of issuers on SME growth markets.
  • Transposition deadline: 12 months after the date of entry into force of the directive.
  • Commission review: three years after transposition and every three years thereafter.
  • Member states must provide information to the Commission two years after entry into force and every year thereafter.
  • Entry into force: the twentieth day following publication in the Official Journal.

Legal basis: Article 50(1), Article 50(2), point (g), and Article 114 of the Treaty on the Functioning of the European Union.