• The draft bill for the Promotion of the long-term involvement of shareholders of listed companies includes measures that will facilitate Spanish companies' access to capital markets and contribute to their sustainability and their ability to create employment
  • The norm establishes that companies can know the identity of their investors, regulates for the first time the figure of voting advisors and adapts the Spanish norm to the international environment allowing “loyalty actions”

The Council of Ministers has validated the draft bill for the Promotion of the long-term involvement of shareholders of listed companies, which modifies the consolidated text of the Capital Companies Act. The standard transposes Directive 828/2017, aimed at improving the corporate governance of listed companies in the European Union and thereby increasing their financing possibilities and long-term sustainability.

The new standard will allow companies to have greater access to market financing, to grow more sustainably, create quality employment and provide greater value to the economy.

For this, the draft law improves the corporate governance of listed companies in Spain, increases the competitiveness of the Spanish capital market while maintaining the protection of investors and adapting the publication of information to European regulations.

Thus, in order to improve corporate governance and so that societies can encourage long-term participation of their shareholders, mechanisms for their identification are established. Likewise, collective investment institutions are obliged to elaborate and make public their investment strategy in the societies in which they invest, explaining how these strategies contribute to the long-term sustainability of companies.

In the same sense, the figure of voting advisors or “proxy advisors”, entities that provide advisory services to investors in relation to the exercise of the voting right derived from the ownership of shares, is established for the first time. to publish information about the code of conduct to which they adhere. The transparency of related operations is also increased in order to avoid possible conflicts of interest.

The draft includes other legislative modifications in addition to the provisions of the Directive and which aim to improve access to finance. These measures include the introduction of loyalty actions, which establishes that shareholders can grant an additional vote for each action held for at least two years. Loyalty actions reinforce the long-term relationship of shareholders, which is the general objective of this standard.

It is also abolished, in line with what is established in other countries of the European Union, the requirement to prepare quarterly financial reports to listed companies, as this obligation could encourage a short-term approach in decision-making.

Finally, the threshold from which an issue of securities requires the preparation and publication of an information booklet is adapted to European regulations, with some exceptions aimed at protecting investors.

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