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Encouraging shareholder engagement with Shareholder Rights Directive II

At the moment you are probably busy with the changes related to the relatively new Shareholder Rights Directive II (SRD II). The aim of this directive is to strengthen the position of shareholders. In addition, SRD II aims to ensure that decisions are taken with a view to the long-term stability of a company. What prompted SRD II and what role does it play in the Capital Markets Union (CMU)? Here is a brief refresher.

14 Apr 2020

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Capital Markets Union: five priorities
SRD II is part of the Capital Markets Union (CMU), an ambitious and prominent initiative of the European Commission. The aim of the CMU is to give companies across the European Union greater access to different types of capital sources. At the same time, it aims to provide alternative opportunities for investors and savers. The European Commission published the following five priorities in its CMU Action Plan:

  1. Increased funding opportunities for European businesses and SMEs;
  2. Appropriate regulation for long-term and sustainable investments and for the financing of European infrastructure;
  3. Increased investment opportunities for private and institutional investors;
  4. Removing cross-border barriers by increasing banks' lending capacity;
  5. Further develop the capital markets of the 28 Member States.

The SRD II Directive provides a more precise elaboration of the CMU's second and fifth priorities.

Why Capital Markets Union and Shareholder Rights Directive II?
The financial crisis revealed a number of problems in Europe that negatively affected corporate governance: an enormous focus on short-termism, poor communication of priorities between investors and their asset managers and underreported investment companies.

SRD II is a powerful instrument with which the European member states want to encourage shareholder involvement by means of legislation and regulations. Better involvement of shareholders should promote responsible behaviour by companies. At the same time, the directive facilitates access to markets abroad and reduces the cost of shareholder rights. If shareholders are involved and active, the Directive ensures that they can positively influence corporate governance and the performance of companies.

In the following blog we will look in more detail at SRD II and what changes it entails for you. Subscribe to the newsletter so as not to miss a blog.

KAS BANK N.V. has been part of CACEIS since September 2019. CACEIS is a European specialist for the custody and administration of securities and high-quality risk and reporting services. We focus entirely on providing securities services to professional investors in the pensions and securities world. The acquisition of KAS BANK N.V. strengthens CACEIS' position in the Netherlands, Germany and the United Kingdom. Our combined product range makes us market leader in custody services and fund administration in Europe. CACEIS is part of Crédit Agricole, the world's largest cooperative financial institution.

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Marc Zuidam

More information on SRD II?

Marc Zuidam

Senior Client Manager
+31 (0)20 557 5176