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
JURI-AD-750107
Committee on Legal Affairs · Rapporteur: René Repasi
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The Committee on Legal Affairs proposes amendments to a proposed directive on multiple-vote share structures for companies seeking admission to trading on a regulated market or an SME growth market.¶¶ It would require member states to let such companies adopt multiple-vote share structures, including before admission, and to ban refusal of admission on that ground.¶¶ It sets safeguards for shareholders without multiple-vote shares and for the company, including a qualified-majority decision, a maximum weighted voting ratio and a cap on multiple-vote shares.¶¶ It requires disclosure of share structure, ownership and control, a 'WVR' stock marker, and protection of employee participation and information rights.¶¶¶ It shortens the Commission's review to 4 years after transposition and every 3 years thereafter, and sets a transposition deadline of 18 months.¶¶¶
Committee position. The Committee on Legal Affairs calls on the Committee on Economic and Monetary Affairs to take into account its amendments, which extend the directive to regulated markets, add safeguards and disclosure duties, protect employee participation, and shorten review and transposition deadlines.¶¶¶
Key points
- Member states should let companies choose governance structures that suit their development stage, including control retention, while continuously safeguarding minority shareholders.¶
- Multiple-vote share structures are defined as at least two classes of shares with different votes per share, and may include time-based increases, restricted distribution rights, and loyalty shares.¶¶
- Employee participation schemes should not see their voting and participation rights reduced by a multiple-vote share structure, and employees' information, consultation and participation rights must be respected.¶¶¶
- The right to adopt multiple-vote share structures would apply to companies seeking first admission on a regulated market or an SME growth market, and member states must not prevent admission on that ground.¶¶¶
- Companies could adopt such structures through new issuance, conversion, or at creation in the articles of association, and before admission; member states may make enhanced voting rights conditional on admission.¶¶
- Member states should require a qualified majority at the general shareholders' meeting for adopting or modifying the structure, and limit the voting weight of multiple-vote shares.¶¶¶
- Member states may add safeguards for shareholders without multiple-vote shares, such as governance commitments, transfer-based or time-based sunset clauses of up to ten years.¶¶
- Companies with multiple-vote share structures must publish detailed information on share structure, voting restrictions, and the identity of multiple-vote holders and persons exercising voting or control rights.¶¶
- Companies with multiple-vote shares traded on a regulated market or an SME growth market must carry a unique stock marker 'WVR' at the end of their stock name.¶
- The Commission should review the directive 4 years after transposition and every 3 years thereafter, with member states providing information 3 years after entry into force and every 3 years thereafter.¶¶
- Member states must transpose the directive within 18 months of its entry into force.¶
Who is affected
- Companies seeking first admission to trading on a regulated market or an SME growth market, which could adopt multiple-vote share structures.¶¶
- Shareholders without multiple-vote shares, who would receive safeguards and a separate class vote on affected rights.¶¶
- Employees, whose participation schemes and information, consultation and participation rights must be protected.¶¶
- Member states, which must transpose the rules and may add safeguards.¶¶
- The Commission, which must report on implementation and effects.¶
Figures and deadlines
- SMEs must constitute at least 50 % of issuers on SME growth markets under Directive 2014/65/EU.¶
- Time-based sunset clauses may last up to ten years.¶
- The Commission should review the directive 4 years after transposition and every 3 years thereafter.¶¶
- Member states must provide information 3 years after entry into force and every 3 years thereafter.
- Member states must transpose the directive within 18 months after its entry into force.¶
Legal basis: Article 50(2), point (g) of the Treaty on the functioning of the European Union¶