JŠK Legal Flash
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.
Employers in the EU must precisely record time worked by their employees
The Court of Justice of the European Union ruled that Member States are required to take measures necessary to ensure that all employers set up an objective, reliable and accessible system enabling the time worked by each employee to be measured. According to the Court, such a system is necessary to protect employees' rights to maximum working time and minimum rest periods. Where such a system is not available, the purpose of the EU legislation whereby employees' rights are deemed essential for the protection of occupational health and safety cannot be fulfilled. In the Czech legal environment this obligation of employers is set by Section 96 of the Labour Code.
(Judgment of the Court (Grand Chamber) of 14 May 2019)
EU Prospectus Regulation finally to become fully effective
The bulk of the EU Prospectus Regulation (Regulation (EU) 2017/1129) will come into force on 21 July 2019. The most notable changes affect the rules on risk factors, prospectus summary, simplified prospectus (a prospectus with reduced disclosure requirements used for secondary issues by issuers that have been listed for at least 18 months on a regulated market) and growth prospectus (a standardised easy-to-use EU Growth Prospectus written in plain language and with reduced disclosure requirements for SME issuers). The new regulation aims to simplify the documentation by making it more practical and user-friendly, e.g. by including only those risk factors that are specific to issuers rather than generic risks. The summary should include only key, material and meaningful information for investors and up to 15 risk factors, with its length limited to seven pages of A4 paper.