Suspension of the Exercise of Voting Rights: A Step Towards Deterrent and Consistent Sanctioning of EU Transparency Requirements?

Abstract

With the adoption of Directive 2013/50/EU, the Member States have been required to introduce the sanction of suspending the exercise of the voting rights of shareholders who fail to notify their major shareholdings in accordance with the national rules that implement the Transparency Directive (Directive 2004/109/EC). Directive 2013/50/EU does not regulate in detail how such suspension should be implemented, nor its consequences, so it is hardly surprising that its implementation varies widely. This article shows where the major differences lie. Directive 2013/50/EU is intended to set a minimum standard, but it is concluded that the wide differences in its implementation may mean that the minimum standard set by the Directive with regard to the suspension of voting rights may be said to very low. This does not necessary mean that the harmonisation is a failure, as it is the total mix of sanctions required by the Directive that should set the minimum level. However, as the Commission considers the suspension of the exercise of voting rights to be a particularly important sanction, it may be presumed that it expected this sanction to be implemented with more teeth than appears to be the case.