Shareholder Rights Directives (SRDs): French market cited as an example by the European Commission

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Read Appendices B–G of the report

The SRD2 Directive on long-term shareholder engagement introduces several obligations for financial intermediaries, including custodians, in terms of transparency, disclosure, and facilitation of shareholder rights. As a reminder, custodians maintain and administer shareholder securities accounts. Their role is now strengthened in the voting chain and in communication between listed companies and shareholders.

The study focused on the following areas: identification, disclosure, and facilitation of the exercise of shareholders’ rights by intermediaries, the holding of general meetings (or GMs) of shareholders and the role of proxy advisory firms.

The report is based on an analysis of the legislation implemented in the 27 Member States of the European Union in accordance with the SRDs¹. France and some of its tools, in particular VOTACCESS, which enables shareholders to exercise their voting rights electronically and securely, were highlighted for the level of compliance achieved and the general efficiency of the solutions developed to meet the requirements of the SRDs.

What improvements have been observed?

Overall, the report noted “a wide range of improvements in the exercise of shareholders’ rights through increased participation in general meetings and improved shareholder identification by companies”.

However, it reveals a mixed result “with regard to the participation of retail shareholders and all shareholders in a cross-border context” and regarding the variability of costs from one country to another.

The report calls for continued roll-out of the provisions provided for by the SRDs by proposing certain changes and stresses the need to monitor their application.

With regard to GMs, the report reviews the traditional barriers that hinder the exchange of information and the exercise of shareholder rights: it prohibits holding virtual GMs and advocates for the systematisation of hybrid GMs (digital/electronic and physical). In particular, SGSS demonstrated its ability to offer such a service at the 21st edition of its Issuer Meeting on 4 February 2025, which gave around one hundred participants the unprecedented experience of a fictitious hybrid GM.

The report recommends harmonising the key dates of the GMs with a view to improving information and the exercise of shareholders’ rights. In this respect, under the impetus of France Post Marché and SGSS, France has initiated actions that could be operational as early as 2026.

Automation of electronic voting confirmation has been suggested.

What are the recommendations for strengthening the exchange of information for the securities of listed companies?

With regard to shareholder identification, the report recommends publishing the shareholder definitions in force within the European Union, which is called for by France Post Marché, and recommends a common functional shareholder definition restricted to the framework for implementing SRD2.

More generally, the report suggests clarifying the scope of instruments to which SRD2 applies. It rejects the exemption thresholds concerning shareholder identification defined by the Member States in favour of flexibility offered to issuers to target their requests in terms of geographical area or level of ownership. 

The report recommends conducting a separate study on technological trends in information exchange and direct link solutions between issuers and shareholders.

How can we monitor the proper application of texts and improve cost transparency?

In general, the report advises that the Commission should develop a monitoring mechanism regarding the effective compliance and implementation of SRD2 requirements in the European Union. This will enable it to assess the usefulness of greater harmonisation of processing and procedures between CSDs, including direct exchanges between shareholders and issuers.

In terms of costs, the main recommendations of the report highlight the need to increase transparency on the fees of custodians and other intermediaries and the need for national authorities to define standardised guidelines at the European level.

What are the next steps?

This Commission report is the introduction to a new legislative cycle designed to strengthen shareholder engagement.

¹Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies and Directive 2007/36/EC as amended by Directive (EU) 2017/828 and the related Implementing Regulation (EU) 2018/1212

Pierre Colladon, Senior Advisor (Public Affairs), Societe Generale Securities Services