Changes for shareholders after the amendment of the Corporate Enterprises Act

The amendment of the Corporate Enterprises Act aims to adapt Spanish legislation to European in terms of promoting the long-term involvement of shareholders in listed companies. The amendment includes the following measures:

Firstly, it repeals article 120 of the Securities Market Act, which requires listed companies in official secondary markets or in other regulated markets to issue a quarterly interim management report on the most significant events and operations. Additionally, it offers a general description of the financial situation and the company results.

In this way, while listed companies will be able to continue presenting their financial quarterly reports, those feeling it is a heavy burden or perceiving that their publication raises excessive pressures by the market may stop the submission.

On the other hand, the transposition of the Community Directive brings benefits to the corporate governance of listed companies in Spain. These developments revolve around two axes:

• Improving the long term financing that listed companies receive through capital markets
• Increasing the transparency surrounding:
  • The actions of capital market players, being institutional investors, asset managers or voting advisers
  • The remuneration of directors
  • The execution of transactions between companies and their related parties.

Other developments include:

• The requirement of the company to identify shareholders and the latest beneficiaries of the securities
• The requirement of management companies of collective investment institutions and venture capital entities to develop and publish a policy of involvement
• The right of shareholders to know the remuneration of managers
• The expansion of regulation surrounding transactions with related parties and their publication
• Greater protection of minority partners
• Directors of listed companies must be physical entities
• Loyalty shares
• The elimination of the requirement for listed companies to publish financial information.

With the amendment of the Corporate Enterprises Act, Spain adapts to the European legislation (Directive (EU) 2017/828) promoting the long-term involvement of shareholders in listed companies.

For further information regarding the amendment of the Corporate Enterprises Act in Spain,