NETHERLANDS - Eumedion, the platform for institutional investors, has rejected most of the proposals in the first drafts of new legislation on shareholders' rights as unnecessary rules which do not sit well with other EU states' activity.
"The proposals are a lucky bag of several proposals aimed at counterbalancing a certain group of shareholders, but they have also an undesired impact on all shareholders and, as such, on the functioning of the whole Dutch equity market," it said.
In its comments to the Treasury, Eumedion indicated it supports the general goal of the legislation, "which is a constructive dialogue between shareholders and companies' boards".
However, details of the official response to early legislation, also stress: "But if a company can identify its shareholders for dialogue, there is no need to lower the reporting threshold from the present 5% to 3% of a shareholder's say.
"Neither is there a pressing need to force shareholders with a 10% shareholding to report their intentions, or to adjust the threshold at which they have the right to put subjects on the agenda," it continued.
According to Eumedion, the proposed new reporting duties also do not link up with rules in most other EU member states.
"Moreover, some proposals, and reporting of intentions in particular, are ill thought-through, and difficult to carry out. They will damage the attractiveness of investing in the Netherlands because of unnecessary administrative costs," it explained.
Eumedion has advised the government to ‘take a step back' and properly investigate which rules are really needed to improve efficiency, as well as understand their potentially undesired effects.
These legislative proposals follows advice for a corporate governance code by the so-called Monitoring Committee, headed-up by Jean Frijns, a former investment chief of the €216bn civil service pension fund ABP.
A consultation was issued by the government in January, to ascertain what could be done to tighten shareholder activism and transparency, and tackle what it considered to be parties ‘acting in concert'. (See earlier IPE story: Governance code "still too unclear")
Eumedion is the lobby organization of 61 institutional investors, representing over €1000bn of assets. According to Eumedion, it also speaks on behalf of its 10 foreign members on the issue.
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