First Proxy season in Slovenian market after transposition of Shareholder Rights Directive II into national law
Shareholder Rights Directive II (SRD II) was transposed into Slovenian legislation by Companies Act (ZGD-1K) which was adopted and published in The Official Gazette of the Republic of Slovenia on 9 February 2021 and came into effect on 24 February 2021. However, the provisions related to SRD II came into effect 6 months after the amended law was published - on 24 August 2021.
Given that the Proxy season in Slovenia generally lasts from April to July, the impact of the amended Companies Act was visible for the first time in the 2022 Proxy season.
Among several other topics, the amended Companies Act impacts the process for registering Proxy participation on the General meetings of Slovenian issuers. According to the amended law, the instruction for the exercise of shareholders’ rights is considered to be authorized to attend the General Meeting and exercise the right to vote. This instruction may be provided using electronic means, specifically by Swift ISO 20022 instruction. This instruction is sent by GSS Slovenia to the local CSD (KDD) which then passes it on to the issuer.
Slovenian issuers were not familiar with this option for instructing Proxy participation on the General meetings, so GSS Slovenia, in cooperation with the KDD, contacted each individual issuer prior to the General meeting to agree on the new method of instructing. All major issuers accepted the new method which can now be considered as an established market practice.
This option to instruct by Swift ISO 20022 brings one major benefit to foreign investors, regarding beneficial owners of securities, since they no longer have to provide several different original documents such as the signed Proxy form, signed Registration form, ASL and other potentially required documents, such as the Extract from Companies register in order to register attendance by proxy for each individual General meeting.
The new process therefore greatly simplifies the registration process and increases the registration success rate for foreign investors wishing to attend the General meeting by proxy.
