SHAREHOLDERS VOTING RIGHTS (5217/06)
Letter from Rt Hon Ian McCartney MP, Minister
for Trade, Investment and Foreign Affairs, Department of Trade
and Industry/Foreign and Commonwealth Office to the Chairman
Further to Jim Fitzpatrick's letter of 21 September
2006,[11]
I should like to inform you that the European Policy Committe
has approved a consultative document on the above proposal.
The Secretary of State shall be informing Parliament
of the publication of the document later this week. Copies of
it will be placed in the House libraries and will be available
on the DTI website. In addition, my Department will be holding
a public meeting on 14 November.
23 October 2006
Letter from the Chairman to Rt Hon Margaret
Hodge MP, Minister of State for Industry and the Regions, Department
of Trade and Industry
Thank you very much for your letter dated 21
September 2006[12]
regarding EM 5217/06 which Sub-Committee A considered at their
meeting on 24 October. The Committee have decided to continue
to hold the document under scrutiny.
The Committee remains in favour of the proposed
Directive and welcomes the general thrust of the Proposal to improve
corporate governance in the Union.
We welcome the progress that you have reported
with regard to the ability of Member States to take further measures
to facilitate the exercise by shareholders of the rights referred
to in the Directive. We also appreciate the information about
the legal base.
On notice periods for general meetings, we were
pleased to hear that the Government's position is attracting support,
and that the European Parliament rapporteurs have proposed amendments
in favour of differentiation. We wish to ensure that these are
included in future drafts and so would be grateful for details
of the Commission's future proposals in this area.
On the right to ask and have answered all questions
at company meetings we are glad to see that you have reached a
compromise, which we also support. We would like to be kept updated
on negotiations.
On the proposal to impose more stringent national
requirements we note that the text now refers to "measures
to facilitate the exercise by shareholders of rights referred
to in this Directive". We do not consider that would necessarily
give Member States the right to impose more stringent national
requirements and would appreciate your analysis of this.
We look forward to receiving details of the
outcome of the public consultation and public meeting which you
refer to. As requested in my earlier correspondence, we would
also appreciate details of the stakeholder consultation you referred
to in your original Explanatory Memorandum.
24 October 2006
Letter from Rt Hon Ian McCartney MP to
the Chairman
Thank you for your letter of 24 October to Margaret
Hodge, about EM 5217/06. I am replying as this matter falls within
my portfolio.
I should like to answer the points your committee
raised, update you on the progress of negotiations on this directive
and request scrutiny clearance for EM 5217/06.
NOTICE PERIODS
FOR MEETINGS
The Commission's are still inclined to retain
the 21 day notice period for all meetings. Nevertheless, there
remains support among some member states for differentiation.
Both European Parliament Committees' (ECON and JURI) consideration
of this directive has been delayed, and they are continuing to
consider amendments which propose differentiation in meeting notice
periods between AGMs and EGMs. The UK continues to support these.
"MORE STRINGENT"
NATIONAL REQUIREMENTS
In negotiating this Article, we considered it
important to establish what "more stringent requirements"
meant in the context of the rights referred to in the rest of
the directive. This is because we wished to ensure that this Article
was not used by Member States to impose requirements which had
the effect of restricting shareholder rights. We believe that
the agreed text "measures to facilitate the exercise by
shareholders of the rights referred to" ensures that
Member States are only able to use the directive to improve, rather
than restrict, shareholder rights.
PERIODS BETWEEN
MEETING NOTICE
AND RECORD
DATE
This is a further issue which requires resolution
to our satisfaction. The latest Presidency compromise in Article
7 permits Member States to set a minimum six day period between
the date of the meeting notice and the record date. This is an
improvement on earlier drafts, where no minimum period was set,
but we do not believe that this minimum period is long enough.
It does not allow sufficient time for shares on "loan"
to be recalled in order for them to be voted; this is good practice
in terms of corporate governance and it is particularly important
to allow sufficient time in cross-border situations. Unfortunately
we are fairly isolated on this issue in the Council; nevertheless
there remains support for a longer period in amendments being
put before the European Parliament Committees, and we are hopeful
that a longer period can be achieved through political agreement.
PUBLIC CONSULTATION
This was issued on 26 October following clearance
from your committee. The public consultation meeting took place
on 14 November. We are in the process of producing a summary of
the meeting, but the overall view of those present was to support
the main negotiating objectives of the Department.
PROGRESS OF
NEGOTIATIONS AND
REQUEST FOR
SCRUTINY CLEARANCE
It is possible, but unlikely, that this dossier
will be on the agenda of the Competitive Council to reach a common
position on 5 December. Discussions in the European Parliament
Committees are continuing and the European Parliament will not
consider this in plenary session until the new year. In these
circumstances I should be most grateful for your committee's scrutiny
clearance of this dossier. There are still two issues (differential
notice periods between AGMs and EGMs, and a longer minimum period
between the meeting notice and the record date) where we continue
to request improvements to the directive. We should be grateful
for the ability to negotiate these improvements with your committee's
support. We have requested clearance from the Commons' Committee
in the same terms.
30 November 2006
Letter from the Chairman to Rt Hon Ian
McCartney MP
Thank you very much for your letters dated 30
November and 3 February[13]
regarding EM 5217/06. I welcome the news in your latest letter
that agreement has now been reached at COREPER. In your letter
of 30 November you referred to the public consultation that your
department had carried out. Sub-Committee A would be grateful
if you could send a copy of the summary of the public consultation
meeting when it is produced.
8 February 2007
11 Correspondence with Ministers, 40th Report of Session
2006-07, HL Paper 187, pp 45-46. Back
12
Correspondence with Ministers, 40th Report of Session 2006-07,
HL Paper 187, pp 45-46. Back
13
Refers to letter addressed to M Connarty, Chairman of Commons
European Scrutiny Committee. Back
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