The law of 24 May 2011 relating the exercise of shareholders’ rights in shareholders’ meeting of listed companies and transposing into Luxembourg Law the provisions 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 was adopted by the Luxembourg Parliament and published in the Luxembourg Official Journal (the Mémorial) on 27 May 2011.
The present law applies to Luxembourg companies whose shares are listed on a regulated market in the European Union and to companies whose shares are listed in a non European Union regulated market if such companies have inserted an explicit provision in that sense in their articles of incorporation.
The first objective of the law is to protect investors and to ensure an effective and efficient exercise of shareholders’ rights with respect to general meetings. To reach this objective, the law focuses on different main measures:
– Equal treatment of shareholders
The law of 2011 implements into Luxembourg Law the principle of equal treatment for all shareholders who are in the same position with regard to participation and the exercise of voting rights in the general meeting.
– Extension of the convening notice
More generous than the Directive 2007/36/EC, the law of 2011 provides a minimum convening notice period for general meetings of 30 days. Therefore, convening notices must be published, at least 30 days prior to the date of a general meeting, in the Mémorial or in medias which ensure effective dissemination to the public throughout the European Union.
If a second meeting is necessary, following a lack of quorum at the first meeting, the convening notice period regarding such a meeting shall be at least 17 days.
– Right to place items on the agenda of the general meeting and to table draft resolutions
The right to place items on the agenda of the general meeting and to submit draft resolutions is recognized to shareholders who hold together at least 5% of the share capital. Any such request must reach the company at least 22 days prior to the date of the general meeting. In such a case, the company publishes a revised agenda, at least 15 days prior to the date of the general meeting.
– Record date
A shareholder shall indicate to the company his intention to participate at the general meeting, at least 14 days prior to the date of the general meeting. Such date is called the “record date”.
– Participation to the general meeting by electronic means
The articles of incorporation of a company may provide that any shareholder has the possibility to participate to the general meeting by electronic means and, as the case may be, the company has to specify in its articles of incorporation the different types of electronic means concerned, notably any or all of the following forms of participation:
o real-time transmission of the general meeting;
o real-time two-way communication enabling shareholders to address the general meeting from a remote location;
o a mechanism for casting votes, whether before or during the general meeting, without the need to appoint a proxy holder who is physically present at the meeting.
– Right to ask questions
The law recognizes for each shareholder the right to ask questions related to items on the agenda of the general meeting and the right to obtain an answer from the company.
– Proxy voting
Each shareholder has the right to appoint any other natural or legal person as a proxy holder to attend and vote at a general meeting in his name. The law specifies that such a proxy holder shall enjoy the same rights to speak and ask questions in the general meeting as those to which the shareholder thus represented would be entitled.
– Voting results
The company shall publish on its Internet site the voting results within a period of time which shall not exceed 15 days after the general meeting. Concerning the establishment of such results, the law of 2011 provides a specific minimum content. Therefore, the company shall establish for each resolution, at least:
o the number of shares for which votes have been validly cast;
o the proportion of the share capital represented by those votes;
o the total number of votes validly cast as well as the number of votes cast in favour of and against each resolution; and, where applicable
o the number of abstentions