Effective 3rd September – traded companies will need to comply with new Regulations
The Companies (Shareholders’ Rights to Voting Confirmations) Regulations 2020 (Regulations), which come into force on 3rd September 2020, provides certain additional obligations for traded companies, a provision of the EU Shareholder Rights Directive 2007 (as amended). The Regulations will apply to all traded companies whose shares are admitted on a regulated market within the UK or EEA, meaning that companies admitted on AIM will be excluded.
The Companies Act 2006 will be amended to include two new sections, section 360AA and section 360BA.
New section 360AA will require a traded company, where a vote is cast on a poll by electronic means, to provide confirmation of receipt of the vote cast. The section will require such confirmation to be provided as “soon as reasonably practicable” after the vote has been received and must be sent by electronic means to the person casting the vote (whether the member, proxy or nominated representative).
The requirement to provide confirmation of receipt applies to any vote cast at a meeting (whether physical or electronic) or in advance.
In addition to section 360AA, the new section 360BA will require a traded company to provide information to a member which enables that member to confirm that their vote on a resolution at a general meeting, where a poll has been taken, has been validly recorded and counted.
Where a member wishes to obtain such information, the request will need to be submitted to the company within 30 days of the general meeting where the member has no other reasonable means by which to determine that their vote has been validly recorded and counted.
Upon receiving the request, the company must provide the required information to that member as “soon as reasonably practicable” and, in any event, within 15 days of whichever is the later of the first working day after (i) the result of the poll is declared for that resolution or (ii) the request for information is received by the company.
By way of next steps, it is suggested that traded companies should review their processes now to ensure that they have appropriate provisions in place to be able to comply with the Regulations from 3rd September 2020. Additionally, it may be prudent for companies to discuss the arrangements with the registrars, or anyone else who manages the poll votes, to ensure that they have the technology and the means to help the company to comply with its obligations.
Nik Paskevic is a solicitor in our Corporate & Commercial Team. If you need contractual advice or help in respect of Corporate & Commercial matters, please contact a member of our expert Corporate & Commercial Team on 020 7631 4141 or you can email firstname.lastname@example.org.