Companies Act (ZGD-1K) transposing Shareholder Rights Directive II into Slovenian legislation
The amended Companies Act transposes provisions on encouragement of long-term shareholder engagement, as well as several other changes as follows:
- identifying shareholders, providing information and facilitating the exercise of shareholder rights;
- transparency of institutional investors, asset managers and voting advisors;
- penalties for non-disclosure of shareholders.
- new standard for defining record date;
- new option for process of registering participation in the General Meeting;
- remuneration policy of directors;
- transparency and approval of related party transactions; and
- new restrictions on creating and establishing legal entities in order to prevent abuses in starting-up new business.
Several articles are of importance to foreign investors:
- required shareholder identification disclosure of the final beneficial owners for assets held on fiduciary accounts;
- process for registering participation in the General Meeting – according to the new Law, the authorization to attend the General Meeting and exercise the right to vote shall be considered as an instruction for the exercise of shareholders' rights and this instruction may be given electronically. The local custodians understand that instruction sent by Swift complies with these definitions and should be sufficient to execute proxy voting service on behalf of clients, however, the actual market practice is not yet established and it is currently unknown how the issuers will understand this provision of the new Law;
- amended standard for defining record date to participate in the General Meeting – the record date for establishing entitlement for participation is seven days before the Meeting (the old standard was four days prior to the General Meeting).
The amended Companies Act came into effect 15 days after it was published in the Official Gazette, i.e. 24 February 2021. However, the provisions related to Shareholder Rights Directive II (mainly shareholder identification) will be effective six months after the amended Law was published – on 24 August 2021.
Technical details on how the local CSD (KDD d.d.) will implement the legislation requirements remain to be seen, with more details expected to ensue following the workshop that the KDD will hold for KDD participants on 31 March 2021.