Amendment to the Capital Markets Act – new obligations for issuers and shareholders to encourage long-term shareholder participation
The Chamber of Deputies of the Czech Parliament approved a draft transposition law of the European Directive encouraging the long-term participation of shareholders in listed companies. The legislation aims to reduce issuers' short-term risks and to incentivise shareholders to pursue middle and long-term yields. Listed companies will have the right to know their ultimate shareholders. They will also have to lay down the remuneration policy of their top management, which will require approval by the general meeting. Some material transactions with related parties will also be subject to such approval. The law will also introduce obligations leading to a higher level of transparency of institutional investors, typically insurance and reinsurance companies, which will have to publish the policy and strategy of their involvement in relation to listed companies.