### collecting societies collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collecting societies exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collecting societies maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collecting societies . amounts collected and due to rightholders should be managed separately from any own assets of the collecting society and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collecting societies ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collecting society should be managed in accordance with criteria which would oblige the collecting society to act prudently , while allowing the collecting society to decide on the most secure and efficient investment policy . this should allow the colleting society to opt for an asset allocation that suits the precise nature and duration of any exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collecting societies to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collecting societies of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed . ### collective management organisations collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collective management organisations exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collective management organisations maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collective management organisations . amounts collected and due to rightholders should be managed separately from any own assets of the collective management organisation and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collective management organisations ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collective management organisation should be managed in accordance with criteria which would oblige the collective management organisation to act prudently , while allowing the collective management organisation to decide on the most secure and efficient investment policy . this should allow the collective management organisation to opt for a secure and profitable asset allocation that prevents exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collective management organisations to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collective management organisations of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed .


### ‘ member of a collecting society’ means a rightholder or an entity directly representing rightholders , including other collecting societies and associations of rightholders , fulfilling the membership requirements of the collecting society ; ### ‘ member’ means a rightholder or an entity directly representing rightholders , including other collective management organisations and associations of rightholders , fulfilling the membership requirements of the collective management organisation , regardless of its legal form ;


### the general meeting shall control the activities of the collecting society by , at least , deciding on the appointment and removal of the auditor and approving the annual transparency report and the auditor ' s report . ### the general meeting shall control the activities of the collective management organisation by , at least , deciding on the appointment and removal of the auditor and approving the annual transparency report and the auditor ' s report . if the financial management practice of the collective management organisation is reasonably in doubt , the general meeting may decide to conduct an internal or external audit . the result of such audit shall be communicated to all members and if necessary to the competent national authority , so that appropriate procedures can be initiated .


### for the purposes of paragraph 2 , measures to identify and locate rightholders shall include verifying membership records and making available to the members of the collecting society as well as to the public a list of works and other subject matter for which one or more rightholders have not been identified or located . ### for the purposes of paragraph 2 , the collective management organisation shall put in place effective measures to identify and locate rightholders while ensuring appropriate safeguards to deter fraud . such measures shall include verifying membership records and making available regularly and at least annually to the members of the collective management organisation as well as to the public a list of works and other subject matter for which one or more rightholders have not been identified or located .


### having the freedom to provide and to receive collective management services across national borders entails that rightholders are able to freely choose the collecting society for the management of their rights , such as public performance or broadcasting rights , or categories of rights , such as interactive communication to the public , provided the collecting society already manages such rights or categories of rights . this implies that rightholders can easily withdraw their rights or categories of rights from a collecting society and entrust or transfer all or part of them to another collecting society or another entity irrespective of the member state of residence or the nationality of either the collecting society or the rightholder . collecting societies managing different types of works and other subject matter , such as literary , musical or photographic works , should also allow this flexibility to rightholders as regards the management of different types of works and other subject matter . collecting societies should inform rightholders of this choice and allow them to exercise it as easily as possible . finally , this directive should not prejudice the possibilities of rightholders to manage their rights individually , including for non - commercial uses . ### having the freedom to provide and to receive collective management services across national borders entails that rightholders are able to freely choose the collecting society for the management of their rights , such as public performance or broadcasting rights , or categories of rights , such as interactive communication to the public , provided the collecting society already manages such rights or categories of rights . this implies that rightholders can easily withdraw their rights or categories of rights from a collecting society and entrust or transfer all or part of them to another collecting society or another entity irrespective of the member state of residence or the nationality of either the collecting society or the rightholder . collecting societies managing different types of works and other subject matter , such as literary , musical or photographic works , should also allow this flexibility to rightholders as regards the management of works , different types of works and other subject matter . collecting societies should inform rightholders of this choice and allow them to exercise it as easily as possible . finally , this directive should not prejudice the possibilities of rightholders to manage their rights individually , including for non - commercial uses or placement in the public domain .


### ‘ director’ means any individual managing director , any member of the administrative board , the management or the supervisory board of a collecting society ; ### ‘ director’ means : where national law or the statute of the collective management organisation provides for a unitary board , any member of the administrative board , where national law or the statute of the collective management organisation provides for a dual board , any member of the management board or the supervisory board ;


### the general meeting shall approve any amendments to the statute and the membership terms of the collecting society , where those terms are not regulated by the statute . ### the general meeting of members shall approve any amendments to the statute and the membership terms of the collective management organisation .


### every member of a collecting society shall have the right to appoint any other natural or legal person as a proxy holder to attend and vote at the general meeting in his name . ### every member of a collective management organisation shall have the right to appoint any other natural or legal person as a proxy holder to attend and vote at the general meeting in his name . to be valid , the proxy shall have been given by the member to the proxy holder no more than three months before its use .


### member states shall ensure that where a collecting society does not grant or offer to grant multi - territorial licences in online rights in musical works or does not allow another collecting society to represent those rights for such purpose by one year after the transposition date of this directive , rightholders who have authorised that collecting society to represent their online rights in musical works can grant multi - territorial licences in their online rights in musical works themselves or through any collecting society complying with the provisions of this title or any other party they authorise . the collecting society which does not grant or offer to grant multi - territorial licences shall continue to grant or offer to grant licences for the online rights in musical works of such rightholders for their use in the territory of the member state where the collecting society is established , unless the rightholders terminate their authorisation to manage them . ### member states shall ensure that where a collective management organisation does not grant or offer to grant multi - territorial licences in online rights in musical works or does not allow another collective management organisation to represent those rights for such purpose by one year after the transposition date of this directive , rightholders who have authorised that collective management organisation to represent their online rights in musical works can grant multi - territorial licences in their online rights in musical works themselves or through any collective management organisation complying with the provisions of this title or any other party they authorise . the rightholders shall notify the affected collective management organisation of their decision without delay . the collective management organisation which does not grant or offer to grant multi - territorial licences shall continue to grant or offer to grant licences for the online rights in musical works of such rightholders for their use in the territory of the member state where the collective management organisation is established , unless the rightholders terminate their authorisation to manage them .


### rightholders shall have the right to terminate the authorisation to manage rights , categories of rights or types of works and other subject matter granted to a collecting society or to withdraw from a collecting society any of the rights or categories of rights or types of works and other subject matter of their choice , for the member states of their choice , upon serving reasonable notice not exceeding six months . the collecting society may decide that such termination or withdrawal will take effect only at the middle and at the end of the financial year , whichever is sooner after the expiry of the notice period . ### rightholders shall have the right to terminate the authorisation to manage rights , categories of rights , works or types of works and other subject matter granted to a collecting society or to withdraw from a collecting society any of the rights or categories of rights , works or types of works and other subject matter of their choice , for the member states of their choice , upon serving reasonable notice not exceeding six months . the collecting society may decide that such termination or withdrawal will take effect only at the end of the financial year .


### rightholders shall have the right to authorise a collecting society of their choice to manage the rights , categories of rights or types of works and other subject matter of their choice , for the member states of their choice , irrespective of the member state of residence or of establishment or the nationality of either the collecting society or the rightholder . ### rightholders shall have the right to authorise a collective management organisation of their choice to manage the rights , categories of rights or types of works and other subject matter of their choice , for the member states of their choice , irrespective of the member state of residence or of establishment or the nationality of either the collective management organisation or the rightholder . collective management organisations shall have the right to require the exclusive assignment of the rights in all works of their members .


### where the amounts due to rightholders cannot be distributed , after five years from the end of the financial year in which the collection of the rights revenue occurred , and provided that the collecting society has taken all necessary measures to identify and locate the rightholders , the collecting society shall decide on the use of the amounts concerned in accordance with article 7 , without prejudice to the right of the rightholder to claim such amounts from the collecting society . ### where the amounts due to rightholders cannot be distributed , after three years from the end of the financial year in which the collection of the rights revenue occurred , it shall be concluded that the collective management organisation has failed to accurately attribute the collected funds to their respective rightholders . this rights revenue shall then be transferred to a fund designated by the member state in which the collective management organisation has its seat . this fund shall thereafter be responsible for any claims from reappearing rightholders and shall support goals in accordance with those set out in article 11 . a collective management organisation may not make any deductions on rights revenue that are transferred to this fund .


### collecting societies are expected to act in the best interests of their members . it is therefore important to provide for systems which enable members of collecting societies to exercise their membership rights by participating in the societies ' decision - making process . the representation of the different categories of members in the decision - making process should be fair and balanced . the effectiveness of the rules on the general meeting of members of collecting societies may be undermined if there were no provisions on how the general meeting should be run . thus , it is necessary to ensure that the general meeting is convened regularly , and at least annually , and that the most important decisions in the collecting society are taken by the general meeting . ### collective management organisations should act in the best collective interests of the rightholders they represent . it is therefore important to provide for systems which enable the members of a collective management organisation to exercise their membership rights by participating in an organisation ' s decision - making process . the representation in the decision - making process of the different categories of members , such as producers or performers , should be fair and balanced . the effectiveness of the rules on the general meeting of members of collective management organisations would be undermined if there were no provisions on how the general meeting of members should be run . thus , it is necessary to ensure that the general meeting of members is convened regularly , and at least annually , and that the most important decisions in the collective management organisation are taken by the general meeting of members .


### members of collecting societies should be allowed to participate and vote in the general meeting ; the exercise of these rights may only be subject to fair and proportionate restrictions . the exercise of voting rights should be made easy . ### members of collective management organisations should be allowed to participate and vote in the general meeting of members ; the exercise of these rights should only be subject to fair and proportionate restrictions . in some exceptional cases , collective management organisations have been established in the legal form of a foundation , hence they have no membership . in such cases , the powers of the general meeting of members should be exercised by the body entrusted with the supervisory function . the general meeting of members should , at least , have the power to set the framework of the activities of the management , in particular with respect to the use of rights revenue by the collective management organisation . the exercise of voting rights should be made easy . in addition to the exercise of members ' rights by electronic means , members should be allowed to participate and vote in the general meeting of members through a proxy . proxy voting should only be restricted in order to make sure that members are not faced with de facto obligations to enter into agreements where they cede their right to participate in the decision making process of the collective management organisation to a third party . the use of proxies should be an active decision and the expression of a will to participate in the decision making processes of the organisation . therefore any contractual agreement stipulating that a member cedes his rights to participate in the general meeting of members to a third party shall be considered as null and void . a collecting society may also require that any one natural or legal person does not exercise more than a certain number of proxies at a given general meeting of members as long as they allow for the exercise of at least 10 proxies . the holder of a proxy must respect the instructions given to him or her by the member on whose behalf the proxy has been issued .


### rightholders shall have the right to terminate the authorisation to manage rights , categories of rights or types of works and other subject matter granted to a collecting society or to withdraw from a collecting society any of the rights or categories of rights or types of works and other subject matter of their choice , for the member states of their choice , upon serving reasonable notice not exceeding six months . the collecting society may decide that such termination or withdrawal will take effect only at the middle and at the end of the financial year , whichever is sooner after the expiry of the notice period . ### rightholders shall have the right to terminate the authorisation to manage rights , categories of rights , works or types of works and other subject matter granted to a collective management organisation or to withdraw from a collective management organisation any of the rights or categories of rights , works or types of works and other subject matter of their choice , at any time during the term of the authorisation , for the member states of their choice , upon serving reasonable notice not exceeding six months . the collective management organisation may decide that such termination or withdrawal will take effect only at the middle and at the end of the financial year , whichever is sooner after the expiry of the notice period .


### members of collecting societies should be allowed to participate and vote in the general meeting ; the exercise of these rights may only be subject to fair and proportionate restrictions . the exercise of voting rights should be made easy . ### members of collecting societies should be entitled to participate and vote in the general meeting ; the exercise of these rights may only be subject to fair and proportionate restrictions . the exercise of rights to vote and stand for election should be made easy for all members , and should where possible take place by electronic means .


### ‘ member of a collecting society’ means a rightholder or an entity directly representing rightholders , including other collecting societies and associations of rightholders , fulfilling the membership requirements of the collecting society ; ### ' member ' means a rightholder or an entity directly representing rightholders , including other collective management organisations and associations of rightholders , fulfilling the membership requirements of the collective management organisation , regardless of its legal form ;


### member states shall ensure that the collecting society regularly and diligently distributes and pays amounts due to all rightholders it represents . the collecting society shall carry out such distribution and payments no later than 12 months from the end of the financial year in which the rights revenue was collected , unless objective reasons related in particular to reporting by users , the identification of rights , rightholders or to the matching of information on works and other subject matter with rightholders prevent the collecting society from respecting this deadline . the collecting society shall carry out such distribution and payments accurately , ensuring equal treatment of all categories of rightholders . ### member states shall ensure that the collective management organisation regularly , transparently , in a timely manner and diligently distributes and pays amounts due to all rightholders it represents . the collective management organisation shall carry out such distribution and payments without undue delay and no later than 12 months after the rights revenue was collected . the collective management organisation shall carry out such distribution and payments at least on a quarterly basis and accurately , ensuring equal treatment of all categories of rightholders .


### member states shall ensure that the collecting society regularly and diligently distributes and pays amounts due to all rightholders it represents . the collecting society shall carry out such distribution and payments no later than 12 months from the end of the financial year in which the rights revenue was collected , unless objective reasons related in particular to reporting by users , the identification of rights , rightholders or to the matching of information on works and other subject matter with rightholders prevent the collecting society from respecting this deadline . the collecting society shall carry out such distribution and payments accurately , ensuring equal treatment of all categories of rightholders . ### member states shall ensure that the collective management organisation regularly and diligently distributes and pays amounts due to all rightholders it represents in accordance with a transparent distribution procedure ensuring equal treatment . the collective management organisation shall carry out such distribution and payments without undue delay as soon as the amount for a rightholder covers the collection costs and maintenance for the corresponding rights and administrative costs , after a period of three months and no later than six months from the collection of the relevant right revenues . the collective management organisation shall carry out such distribution and payments accurately , ensuring equal treatment of all categories of rightholders .


### members should be allowed to take part in monitoring the management of collecting societies . to this end , collecting societies should establish a supervisory function appropriate to their organisational structure and allow members to be represented in the body that exercises this function . to avoid imposing excessive burden on smaller collecting societies and to make the obligations arising from this directive proportionate , member states should be able to , if they consider this to be necessary , exclude the smallest collecting societies from having to organise such a supervisory function . ### members should be allowed to take part in monitoring the management of collective management organisations . to this end , collective management organisations should establish a supervisory function appropriate to their organisational structure and allow members , representing different categories of rightholders , to be represented in a balanced manner in the body that exercises this function . to avoid imposing excessive burden on smaller collecting societies and to make the obligations arising from this directive proportionate , member states should be able to , if they consider this to be necessary , exclude the smallest collecting societies from having to organise such a supervisory function .


### for reasons of sound management , a collecting society ' s senior management must be independent . managers and executive directors should be required to declare annually to the collecting society whether there are conflicts between their interests and those of the society . ### for reasons of sound management , a collective management organisation ' s senior management must be independent . managers and executive directors should be required to declare before taking up their duties and thereafter annually to the collective management organisation whether there are conflicts between their interests and those of the organisation .


### for reasons of sound management , a collecting society ' s senior management must be independent . managers and executive directors should be required to declare annually to the collecting society whether there are conflicts between their interests and those of the society . ### for reasons of sound management , a collective management organisation ' s management must be independent . managers and executive directors should be required to declare before taking up their duties in a collective management organisation whether there are conflicts between their interests and those of the organisation . moreover , they should also be required to make such declarations of conflict of interest every year after taking up their duties in a collective management organisation .


### ‘ director’ means any individual managing director , any member of the administrative board , the management or the supervisory board of a collecting society ; ### ‘ director’ means : where national law or the statute of the collective management organisation provides for a unitary board , any member of the administrative board , where national law or the statute of the collective management organisation provides for a dual board , any member of the management board or the supervisory board ;


### in the online music sector , where collective management of authors ' rights on a territorial basis remains the norm , it is essential to create conditions conducive to the most effective licensing practices by collecting societies , in an increasingly cross - border context . it is therefore appropriate to provide for a set of rules coordinating basic conditions for the provision by collecting societies of multi - territorial collective licensing of authors ' online rights in musical works . these provisions should ensure the necessary minimum quality of the cross - border services provided by collecting societies , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire and thus reducing the number of licences a user needs to operate a multi - territorial service . these provisions should enable a collecting society to request another collecting society to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested society , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting society . the development of legal online music services across the union should also contribute to the fight against piracy . ### in the online music sector , where collective management of authors ' rights on a territorial basis remains the norm , it is essential to create conditions conducive to the most effective licensing practices by collective management organisations , in an increasingly cross - border context . in order to allow the aggregation of a multiplicity of repertoires and to be able to grant multi - repertoire and multi - territorial licences , collective management organisations should have the possibility to conclude representation agreements with other collective management organisations for the coordination and efficiency of such licenses under equal and non - discriminatory terms . it is appropriate to provide for a set of rules coordinating basic conditions for the provision by collective management organisations of multi - territorial collective licensing of authors ' online rights in musical works . these provisions should ensure the necessary minimum quality of the cross - border services provided by collective management organisations , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire and thus reducing the number of licences a user needs to operate a multi - territorial service . these provisions should enable a collective management organisation to request another collective management organisation to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested organisation , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting organisation . the development of legal online music services across the union should also contribute to the fight against piracy .


### collecting societies collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collecting societies exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collecting societies maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collecting societies . amounts collected and due to rightholders should be managed separately from any own assets of the collecting society and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collecting societies ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collecting society should be managed in accordance with criteria which would oblige the collecting society to act prudently , while allowing the collecting society to decide on the most secure and efficient investment policy . this should allow the colleting society to opt for an asset allocation that suits the precise nature and duration of any exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collecting societies to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collecting societies of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed . ### collective management organisations collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collective management organisations exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collective management organisations maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collective management organisations . amounts collected and due to rightholders should be managed separately from any own assets of the collective management organisation and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collective management organisations ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collective management organisation should be managed in accordance with criteria which would oblige the collective management organisation to act prudently , while allowing the collective management organisation to decide on the most secure and efficient investment policy . this should allow the collective management organisation to opt for a secure and profitable asset allocation that prevents exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collective management organisations to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collective management organisations of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed .


### member states shall ensure that the rightholder gives express consent specifically for each right or category of rights or type of works and other subject matter which that rightholder authorises the collecting society to manage and that any such consent is evidenced in documentary form . ### member states shall ensure that the rightholder gives express consent specifically for each right or category of rights or type of works and other subject matter which that rightholder authorises the collecting society to manage and that any such consent is evidenced in documentary form ; this paragraph does not apply to the arrangements in the member states concerning the administration of rights through extended collective licenses , legal presumptions of representation or transfer , mandatory collective management or similar arrangements or a combination of them .


### having the freedom to provide and to receive collective management services across national borders entails that rightholders are able to freely choose the collecting society for the management of their rights , such as public performance or broadcasting rights , or categories of rights , such as interactive communication to the public , provided the collecting society already manages such rights or categories of rights . this implies that rightholders can easily withdraw their rights or categories of rights from a collecting society and entrust or transfer all or part of them to another collecting society or another entity irrespective of the member state of residence or the nationality of either the collecting society or the rightholder . collecting societies managing different types of works and other subject matter , such as literary , musical or photographic works , should also allow this flexibility to rightholders as regards the management of different types of works and other subject matter . collecting societies should inform rightholders of this choice and allow them to exercise it as easily as possible . finally , this directive should not prejudice the possibilities of rightholders to manage their rights individually , including for non - commercial uses . ### having the freedom to receive services for collective management of copyright and related rights across national borders entails that rightholders are able to freely choose the collective management organisation for the management of their rights , such as public performance or broadcasting rights , or categories of rights , such as interactive communication to the public , provided the collective management organisation already manages such rights or categories of rights . this implies that rightholders can easily withdraw their rights or categories of rights from a collective management organisation and entrust or transfer all or part of them to another collective management organisation or another entity irrespective of the member state of residence or the nationality of either the collective management organisation or the rightholder . collective management organisations managing different types of works and other subject matter , such as literary , musical or photographic works , should also allow this flexibility to rightholders as regards the management of different types of works and other subject matter . collective management organisations should inform rightholders of this choice and allow them to exercise it as easily as possible . finally , this directive should not prejudice the possibilities of rightholders to manage their rights individually , including for non - commercial uses .


### ‘ rights revenue’ means income collected by a collecting society on behalf of rightholders , whether from an exclusive right , a right to remuneration or a right to compensation ; ### ‘ rights revenue’ means income collected by a collective management organisation on behalf of rightholders , whether from an exclusive right , a right to remuneration or a right to compensation , and including any income derived from the investments of rights revenue ;


### member states shall ensure that the collecting society regularly and diligently distributes and pays amounts due to all rightholders it represents . the collecting society shall carry out such distribution and payments no later than 12 months from the end of the financial year in which the rights revenue was collected , unless objective reasons related in particular to reporting by users , the identification of rights , rightholders or to the matching of information on works and other subject matter with rightholders prevent the collecting society from respecting this deadline . the collecting society shall carry out such distribution and payments accurately , ensuring equal treatment of all categories of rightholders . ### member states shall ensure that the collective management organisations regularly and diligently distributes and pays amounts due to all rightholders it represents . the collective management organisation shall carry out such distribution and payments without undue delay and no later than six months after the rights revenue was collected , unless objective reasons related in particular to reporting by users , the identification of rights , rightholders or to the matching of information on works and other subject matter with rightholders prevent the collective management organisation from respecting this deadline . the collective management organisation shall carry out such distribution and payments accurately , ensuring equal treatment of all categories of rightholders .


### any restriction on the right of the members of the collecting society to participate and to exercise voting rights at the general meeting shall be fair and proportionate and be based on the following criteria : duration of membership ; amounts received or due to a member in relation to the specified financial period . ### every member of a collective management organisation shall have the right to participate in and to stand for election and vote at the general meeting , including , where appropriate , by electronic vote . any restriction on that right shall be fair and proportionate and shall be limited to the criteria based on the duration of membership .


### the policy on the distribution of the amounts due to rightholders , except where the general meeting decides to delegate this decision to the body exercising the supervisory function ; ### the general policy on the distribution of the amounts due to rightholders ;


### member states shall ensure that the persons who effectively manage the business of a collecting society and its directors , with the exception of the directors exercising supervisory function , design procedures so as to avoid conflicts of interest . the collecting society shall have procedures to identify , manage , monitor and disclose conflicts of interest in order to prevent them from adversely affecting the interests of members of the society . ### member states shall ensure that collective management organisations put in place and apply procedures so as to avoid conflicts of interest . the collective management organisation shall have procedures in place to identify , manage , monitor and disclose conflicts of interest or potential conflicts of interest in order to prevent them from adversely affecting the collective interests of the members and rightholders represented by the organisation .


### there are significant differences in the national rules governing the functioning of collecting societies , in particular as regards their transparency and accountability towards their members and rightholders . beyond the difficulties non - domestic rightholders face when exercising their rights and the too often poor financial management of the revenues collected , problems with the functioning of collecting societies lead to inefficiencies in the exploitation of copyright and related rights across the internal market to the detriment of the members of collecting societies , rightholders and users alike . these difficulties do not arise in the functioning of independent rights management service providers who act as agents for rightholders for the management of their rights on a commercial basis and in which rightholders do not exercise membership rights . ### there are significant differences in the national rules governing the functioning of collective management organisations , in particular as regards their transparency and accountability towards their members and rightholders . furthermore , problems with the functioning of collective management organisations lead to inefficiencies in the exploitation of copyright and related rights across the internal market to the detriment of the members of collective management organisations , rightholders and users alike . these difficulties do not arise in the functioning of independent rights management service providers who act as agents for rightholders for the management of their rights on a commercial basis and in which rightholders do not exercise membership rights , provided that they do not compete directly with management organisations in the areas of collecting and distributing monies due to rightholders . in such cases the criteria of membership and control by the membership are not relevant .


### collecting societies collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collecting societies exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collecting societies maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collecting societies . amounts collected and due to rightholders should be managed separately from any own assets of the collecting society and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collecting societies ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collecting society should be managed in accordance with criteria which would oblige the collecting society to act prudently , while allowing the collecting society to decide on the most secure and efficient investment policy . this should allow the colleting society to opt for an asset allocation that suits the precise nature and duration of any exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collecting societies to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collecting societies of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed . ### collective management organisations collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that collective management organisation , or another organisation . it is therefore important that collective management organisations exercise the utmost diligence , with maximum efficiency , in collecting , managing and distributing that revenue . accurate distribution is only possible where collective management organisations maintain proper and transparent records of membership , licences and use of works and other subject matter . data on the use of the rights managed by collective management organisations should also be provided by rightholders and users with due speed and care , and verified by those organisations . amounts collected and due to rightholders should be managed separately from any own assets of the collective management organisation and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collective management organisation ' s general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collective management organisation should be managed in accordance with criteria which would oblige the organisation to act prudently , while allowing it to decide on the most secure and efficient investment policy . as the collective management of rights by collective management organisations is not a profit - making activity , these organisations should opt for an asset allocation that is suitable in terms of its precise nature and duration , and avoids any exposure to risk of rights revenue . this should allow the collective management organisation to opt for a secure and profitable asset allocation that prevents exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collective management organisations to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collective management organisations of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed .


### rightholders shall have the right to terminate the authorisation to manage rights , categories of rights or types of works and other subject matter granted to a collecting society or to withdraw from a collecting society any of the rights or categories of rights or types of works and other subject matter of their choice , for the member states of their choice , upon serving reasonable notice not exceeding six months . the collecting society may decide that such termination or withdrawal will take effect only at the middle and at the end of the financial year , whichever is sooner after the expiry of the notice period . ### rightholders shall have the right to terminate the authorisation to manage rights , categories of rights or types of works and other subject matter granted to a collective management organisation or to withdraw from a collective management organisation any of the rights or categories of rights or types of works and other subject matter of their choice , at any time during the term of the authorisation , for the member states of their choice , upon serving reasonable notice not exceeding six months . the collecting society may decide that such termination or withdrawal will take effect only at the middle and at the end of the financial year , whichever is sooner after the expiry of the notice period . member states may provide for measures , in compliance with articles 101 and 102 tfeu , allowing collecting societies to adopt adjusted detailed rules aimed at restricting the scope for rightholders to go back and forth in an objectively abusive manner .


### ‘ member of a collecting society’ means a rightholder or an entity directly representing rightholders , including other collecting societies and associations of rightholders , fulfilling the membership requirements of the collecting society ; ### ‘ member’ means a rightholder or an entity directly representing rightholders , including other collective management organisations and associations of rightholders , fulfilling the membership requirements of the collective management organisation , regardless of its legal form ;


### members of collecting societies should be allowed to participate and vote in the general meeting ; the exercise of these rights may only be subject to fair and proportionate restrictions . the exercise of voting rights should be made easy . ### all members of collective management organisations should be allowed to participate and vote in the general meeting ; the exercise of these rights may only be subject to fair and proportionate restrictions . the exercise of voting rights should be made easy , and whenever possible by electronic means .


### moreover , member states should establish appropriate procedures by means of which it will be possible to make complaints against collecting societies who do not comply with the law and to ensure that , where appropriate , effective , proportionate and dissuasive sanctions are imposed . member states should determine which authorities should be responsible for administering the complaints procedures and sanctions . to ensure that the requirements for multi - territorial licensing are complied with , specific provisions on the monitoring of their implementation should be laid down . the competent authorities of the member states and the european commission should cooperate with each other to this end . ### moreover , member states should establish appropriate procedures by means of which it will be possible to make complaints against collective management organisations who do not comply with the law and to ensure that , where appropriate , effective , proportionate and dissuasive measures and sanctions are imposed . member states should determine which authorities should be responsible for administering the complaints procedures and sanctions . to ensure that the requirements for multi - territorial licensing are complied with , specific provisions on the monitoring of their implementation should be laid down . the competent authorities of the member states and the european commission should cooperate with each other to this end .


### collecting societies are expected to act in the best interests of their members . it is therefore important to provide for systems which enable members of collecting societies to exercise their membership rights by participating in the societies ' decision - making process . the representation of the different categories of members in the decision - making process should be fair and balanced . the effectiveness of the rules on the general meeting of members of collecting societies may be undermined if there were no provisions on how the general meeting should be run . thus , it is necessary to ensure that the general meeting is convened regularly , and at least annually , and that the most important decisions in the collecting society are taken by the general meeting . ### collective management organisations should act in the best collective interests of the rightholders they represent . it is therefore important to provide for systems which enable members of collecting societies to exercise their membership rights by participating in the societies ' decision - making process . the representation in the decision - making process of the different categories of members , such as producers or performers , should be fair and balanced . the effectiveness of the rules on the general assembly of members of collective management organisations would be undermined if there were no provisions on how the general assembly should be run . thus , it is necessary to ensure that the general assembly is convened regularly , and at least annually , and that the most important decisions in the collective management organisation are taken by the general assembly .


### collecting societies are expected to act in the best interests of their members . it is therefore important to provide for systems which enable members of collecting societies to exercise their membership rights by participating in the societies ' decision - making process . the representation of the different categories of members in the decision - making process should be fair and balanced . the effectiveness of the rules on the general meeting of members of collecting societies may be undermined if there were no provisions on how the general meeting should be run . thus , it is necessary to ensure that the general meeting is convened regularly , and at least annually , and that the most important decisions in the collecting society are taken by the general meeting . ### collective management organisations should act in the best collective interests of the rightholders they represent . it is therefore important to provide for systems which enable the members of a collective management organisation to exercise their membership rights by participating in an organisation ' s decision - making process . the representation in the decision - making process of the different categories of members , such as producers or performers , should be fair and balanced . the effectiveness of the rules on the general meeting of members of collective management organisations would be undermined if there were no provisions on how the general meeting of members should be run . thus , it is necessary to ensure that the general meeting of members is convened regularly , and at least annually , and that the most important decisions in the collective management organisation are taken by the general meeting of members .


### member states shall ensure that disputes between collecting societies and users concerning existing and proposed licensing conditions , tariffs , and any refusal to grant a licence can be submitted to a court , and if appropriate , to an independent and impartial dispute resolution body . ### member states shall ensure that disputes between collective management organisations and users concerning existing and proposed licensing conditions , tariffs , the calculation of tariffs and any refusal to grant a licence can be submitted to a court , and if appropriate , to an independent and impartial dispute resolution body . however , if the law of the member state concerned so permits , priority shall be given to mediation .


### in the online music sector , where collective management of authors ' rights on a territorial basis remains the norm , it is essential to create conditions conducive to the most effective licensing practices by collecting societies , in an increasingly cross - border context . it is therefore appropriate to provide for a set of rules coordinating basic conditions for the provision by collecting societies of multi - territorial collective licensing of authors ' online rights in musical works . these provisions should ensure the necessary minimum quality of the cross - border services provided by collecting societies , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire and thus reducing the number of licences a user needs to operate a multi - territorial service . these provisions should enable a collecting society to request another collecting society to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested society , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting society . the development of legal online music services across the union should also contribute to the fight against piracy . ### in the online music sector , where collective management of authors ' rights on a territorial basis remains the norm , it is essential to create conditions conducive to the most effective licensing practices by collective management organisations , in an increasingly cross - border context . in order to allow the aggregation of a multiplicity of repertoires and to be able to grant multi - repertoire and multi - territorial licences , collective management organisations should have the possibility to conclude representation agreements with other collective management organisations for the coordination and efficiency of such licenses under equal and non - discriminatory terms . it is appropriate to provide for a set of rules coordinating basic conditions for the provision by collective management organisations of multi - territorial collective licensing of authors ' online rights in musical works . these provisions should ensure the necessary minimum quality of the cross - border services provided by collective management organisations , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire and thus reducing the number of licences a user needs to operate a multi - territorial service . these provisions should enable a collective management organisation to request another collective management organisation to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested organisation , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting organisation . the development of legal online music services across the union should also contribute to the fight against piracy .


### member states shall ensure that the persons who effectively manage the business of a collecting society and its directors , with the exception of the directors exercising supervisory function , design procedures so as to avoid conflicts of interest . the collecting society shall have procedures to identify , manage , monitor and disclose conflicts of interest in order to prevent them from adversely affecting the interests of members of the society . ### member states shall ensure that the persons who effectively manage the business of a collective management organisation and its directors , with the exception of the directors exercising supervisory function , design procedures so as to avoid conflicts of interest . the collective management organisation shall have procedures to identify , manage , monitor and disclose conflicts of interest in order to prevent them from adversely affecting the interests of members of the organisation . such procedures shall also require that before taking up their duties and then once a year such persons and directors , make an individual statement on conflict of interests to the body entrusted with the supervisory function and to the members of the organisation , as well as make such a statement publicly accessible through the website of the collective management organisation .


### members of collecting societies should be allowed to participate and vote in the general meeting ; the exercise of these rights may only be subject to fair and proportionate restrictions . the exercise of voting rights should be made easy . ### members of collective management organisations should be allowed to participate and vote in the general meeting of members ; the exercise of these rights should only be subject to fair and proportionate restrictions . in some exceptional cases , collective management organisations have been established in the legal form of a foundation , hence they have no membership . in such cases , the powers of the general meeting of members should be exercised by the body entrusted with the supervisory function . the general meeting of members should , at least , have the power to set the framework of the activities of the management , in particular with respect to the use of rights revenue by the collective management organisation . the exercise of voting rights should be made easy . in addition to the exercise of members ' rights by electronic means , members should be allowed to participate and vote in the general meeting of members through a proxy . proxy voting should only be restricted in order to make sure that members are not faced with de facto obligations to enter into agreements where they cede their right to participate in the decision making process of the collective management organisation to a third party . the use of proxies should be an active decision and the expression of a will to participate in the decision making processes of the organisation . therefore any contractual agreement stipulating that a member cedes his rights to participate in the general meeting of members to a third party shall be considered as null and void . a collecting society may also require that any one natural or legal person does not exercise more than a certain number of proxies at a given general meeting of members as long as they allow for the exercise of at least 10 proxies . the holder of a proxy must respect the instructions given to him or her by the member on whose behalf the proxy has been issued .


### collecting societies collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collecting societies exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collecting societies maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collecting societies . amounts collected and due to rightholders should be managed separately from any own assets of the collecting society and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collecting societies ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collecting society should be managed in accordance with criteria which would oblige the collecting society to act prudently , while allowing the collecting society to decide on the most secure and efficient investment policy . this should allow the colleting society to opt for an asset allocation that suits the precise nature and duration of any exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collecting societies to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collecting societies of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed . ### collective management organisations collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collective management organisations exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collective management organisations maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collective management organisations . amounts collected and due to rightholders should be managed separately from any own assets of the collective management organisation and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collective management organisations ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collective management organisation should be managed in accordance with criteria which would oblige the collective management organisation to act prudently , while allowing the collective management organisation to decide on the most secure and efficient investment policy . this should allow the collective management organisation to opt for a secure and profitable asset allocation that prevents exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collective management organisations to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collective management organisations of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed .


### member states shall ensure that collecting societies make available to their members and rightholders effective and timely procedures for dealing with complaints and for resolving disputes in particular in relation to authorisation to manage rights and termination or withdrawal of rights , membership terms , the collection of amounts due to rightholders , deductions and distributions . ### member states shall ensure that collective management organisations make available to their members and rightholders effective and timely procedures for dealing with complaints and for resolving disputes in particular in relation to authorisation to manage rights and termination or withdrawal of rights , membership terms , the collection of amounts due to rightholders , deductions and distributions . the procedures for dealing with complaints and for resolving disputes shall be independent .


### ‘ director’ means any individual managing director , any member of the administrative board , the management or the supervisory board of a collecting society ; ### ‘ director’ means : where national law or the statute of the collective management organisation provides for a unitary board , any member of the administrative board , where national law or the statute of the collective management organisation provides for a dual board , any member of the management board or the supervisory board ;


### member states shall ensure that collecting societies act in the best interest of their members and do not impose on rightholders whose rights they manage any obligations which are not objectively necessary for the protection of the rights and interests of these rightholders . ### member states shall ensure that collective management organisations act in the best interest of the rightholders whose rights they manage and do not impose on them any obligations which could undermine the protection of their rights and their interests , provided they allow the collective management organisations sufficient discretion to negotiate with rights users .


### the requested collecting society shall accept such a request if it is already granting or offering to grant multi - territorial licences for the same category of online rights in musical works in the repertoire of one or more other collecting societies . ### the requested collective management organisation shall accept such a request within 1 month after receipt , if it is already granting or offering to grant multi - territorial licences for the same category of online rights in musical works in the repertoire of one or more other collective management organisations .


### member states shall ensure that the collecting society regularly and diligently distributes and pays amounts due to all rightholders it represents . the collecting society shall carry out such distribution and payments no later than 12 months from the end of the financial year in which the rights revenue was collected , unless objective reasons related in particular to reporting by users , the identification of rights , rightholders or to the matching of information on works and other subject matter with rightholders prevent the collecting society from respecting this deadline . the collecting society shall carry out such distribution and payments accurately , ensuring equal treatment of all categories of rightholders . ### member states shall ensure that the collective management organisation regularly and diligently distributes and pays amounts due to all rightholders it represents in accordance with a transparent distribution procedure ensuring equal treatment . the collective management organisation shall carry out such distribution and payments without undue delay as soon as the amount for a rightholder covers the collection costs and maintenance for the corresponding rights and administrative costs , after a period of three months and no later than six months from the collection of the relevant right revenues . the collective management organisation shall carry out such distribution and payments accurately , ensuring equal treatment of all categories of rightholders .


### there are significant differences in the national rules governing the functioning of collecting societies , in particular as regards their transparency and accountability towards their members and rightholders . beyond the difficulties non - domestic rightholders face when exercising their rights and the too often poor financial management of the revenues collected , problems with the functioning of collecting societies lead to inefficiencies in the exploitation of copyright and related rights across the internal market to the detriment of the members of collecting societies , rightholders and users alike . these difficulties do not arise in the functioning of independent rights management service providers who act as agents for rightholders for the management of their rights on a commercial basis and in which rightholders do not exercise membership rights . ### there are significant differences in the national rules governing the functioning of collecting societies , in particular as regards their transparency and accountability towards their members , rightholders and users . beyond the difficulties non - domestic rightholders face when exercising their rights and the too often poor financial management of the revenues collected , problems with the functioning of collecting societies lead to inefficiencies in the exploitation of copyright and related rights across the internal market to the detriment of the members of collecting societies , rightholders and users alike .


### for the purposes of paragraph 2 , measures to identify and locate rightholders shall include verifying membership records and making available to the members of the collecting society as well as to the public a list of works and other subject matter for which one or more rightholders have not been identified or located . ### for the purposes of paragraph 2 , the collective management organisation shall put in place effective measures to identify and locate rightholders while ensuring appropriate safeguards to deter fraud . such measures shall include verifying membership records and making available regularly and at least annually to the members of the collective management organisation as well as to the public a list of works and other subject matter for which one or more rightholders have not been identified or located .


### in the online music sector , where collective management of authors’ rights on a territorial basis remains the norm , it is essential to create conditions conducive to the most effective licensing practices by collecting societies , in an increasingly cross - border context . it is therefore appropriate to provide for a set of rules coordinating basic conditions for the provision by collecting societies of multi - territorial collective licensing of authors’ online rights in musical works . these provisions should ensure the necessary minimum quality of the cross - border services provided by collecting societies , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire and thus reducing the number of licences a user needs to operate a multi - territorial service . these provisions should enable a collecting society to request another collecting society to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested society , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting society . the development of legal online music services across the union should also contribute to the fight against piracy . ### unlike other creative sectors , where direct licensing plays a greater role , collective management of authors’ rights on a territorial basis remains the norm in the online music sector . it is therefore essential to create conditions conducive to the most effective licensing practices by collective management organisations . it is therefore appropriate to provide for a set of rules coordinating basic conditions for the provision by collective management organisations of multi - territorial collective licensing of authors’ online rights in musical works , thereby enhancing consumer choice and advancing towards completion of the digital single market . these provisions should ensure the necessary minimum quality of the cross - border services provided by collective management organisations , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire , thus reducing the number of licences a user needs to operate a multi - territorial service and enabling them to be issued more efficiently . these provisions should enable a collective management organisation to request another collective management organisation to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested organisation , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting organisation . the development of legal online music services across the union should also contribute to the fight against piracy .


### in the online music sector , where collective management of authors ' rights on a territorial basis remains the norm , it is essential to create conditions conducive to the most effective licensing practices by collecting societies , in an increasingly cross - border context . it is therefore appropriate to provide for a set of rules coordinating basic conditions for the provision by collective management organisations of multi - territorial collective licensing of authors ' online rights in musical works . these provisions should ensure the necessary minimum quality of the cross - border services provided by collecting societies , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire and thus reducing the number of licences a user needs to operate a multi - territorial service . these provisions should enable a collecting society to request another collecting society to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested society , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting society . the development of legal online music services across the union should also contribute to the fight against piracy . ### unlike other creative sectors where direct licensing plays a more prominent role , the collective management of authors ' rights on a territorial basis remains the norm in the music sector . therefore it is essential to create conditions conducive to the most effective licensing practices by collective management organisations , in an increasingly cross - border context . it is therefore appropriate to provide for a set of rules coordinating basic conditions for the provision by collective management organisations of multi - territorial collective licensing of authors ' online rights in musical works . these provisions should ensure the necessary minimum quality of the cross - border services provided by collective management organisations , notably in terms of transparency of repertoire represented and accuracy of financial flows related to the use of the rights . they should also set out a framework for facilitating the voluntary aggregation of music repertoire and thus reducing the number of licences a user needs to operate a multi - territorial service . these provisions should enable a collecting society to request another collecting society to represent its repertoire on a multi - territorial basis where it cannot fulfil the requirements itself . there should be an obligation on the requested society , provided that it aggregates repertoire and offers or grants multi - territorial licences , to accept the mandate of the requesting society , without abusing its market power . the development of legal online music services across the union should also contribute to a decrease in unauthorized copying of music .


### commission recommendation 2005 / 737 / ec promoted a new regulatory environment better suited to the management , at union level , of copyright and related rights for the provision of legitimate online music services . it recognised that in an era of online exploitation of musical works , commercial users need a licensing policy that corresponds to the ubiquity of the online environment and which is multi - territorial . however , the recommendation , due to its voluntary nature , has not been sufficient to encourage the widespread multi - territorial licensing of online rights in musical works and to address the specific demands of multi - territorial licensing . ### commission recommendation 2005 / 737 / ec promoted a new regulatory environment better suited to the management , at union level , of copyright and related rights for the provision of legitimate online music services . it recognised that in an era of online exploitation of musical works , commercial users need a licensing policy that corresponds to the ubiquity of the online environment and which is multi - territorial . however , the recommendation has not been sufficient to encourage the widespread multi - territorial licensing of online rights in musical works and to address the specific demands of multi - territorial licensing .


### member states shall ensure that the persons who effectively manage the business of a collecting society and its directors , with the exception of the directors exercising supervisory function , manage the collecting society in a sound and prudent manner , using sound administrative and accounting procedures and internal control mechanisms . ### member states shall ensure that a collective management organisation puts in place and applies procedures to ensure that the persons who manage the business of the collective management organisation do so in a sound , prudent and appropriate manner , using sound administrative and accounting procedures and internal control mechanisms .


### having the freedom to provide and to receive collective management services across national borders entails that rightholders are able to freely choose the collecting society for the management of their rights , such as public performance or broadcasting rights , or categories of rights , such as interactive communication to the public , provided the collecting society already manages such rights or categories of rights . this implies that rightholders can easily withdraw their rights or categories of rights from a collecting society and entrust or transfer all or part of them to another collecting society or another entity irrespective of the member state of residence or the nationality of either the collecting society or the rightholder . collecting societies managing different types of works and other subject matter , such as literary , musical or photographic works , should also allow this flexibility to rightholders as regards the management of different types of works and other subject matter . collecting societies should inform rightholders of this choice and allow them to exercise it as easily as possible . finally , this directive should not prejudice the possibilities of rightholders to manage their rights individually , including for non - commercial uses . ### having the freedom to provide and to receive collective management services across national borders entails that rightholders are able to freely choose the collecting society for the management of their rights , such as public performance or broadcasting rights , or categories of rights , such as interactive communication to the public , provided the collecting society already manages such rights or categories of rights . this implies that rightholders can easily withdraw their rights or categories of rights from a collecting society and entrust or transfer all or part of them to another collecting society or another entity irrespective of the member state of residence or the nationality of either the collecting society or the rightholder . collecting societies managing different types of works and other subject matter , such as literary , musical or photographic works , should also allow this flexibility to rightholders as regards the management of works , different types of works and other subject matter . collecting societies should inform rightholders of this choice and allow them to exercise it as easily as possible . finally , this directive should not prejudice the possibilities of rightholders to manage their rights individually , including for non - commercial uses or placement in the public domain .


### member states shall ensure that where a collecting society does not grant or offer to grant multi - territorial licences in online rights in musical works or does not allow another collecting society to represent those rights for such purpose by one year after the transposition date of this directive , rightholders who have authorised that collecting society to represent their online rights in musical works can grant multi - territorial licences in their online rights in musical works themselves or through any collecting society complying with the provisions of this title or any other party they authorise . the collecting society which does not grant or offer to grant multi - territorial licences shall continue to grant or offer to grant licences for the online rights in musical works of such rightholders for their use in the territory of the member state where the collecting society is established , unless the rightholders terminate their authorisation to manage them . ### member states shall ensure that where a collective management organisation does not grant or offer to grant multi - territorial licences in online rights in musical works or does not allow another collective management organisation to represent those rights for such purpose by one year after the transposition date of this directive , rightholders who have authorised that collective management organisation to represent their online rights in musical works can grant multi - territorial licences in their online rights in musical works themselves or through any collective management organisation complying with the provisions of this title or any other party they authorise . the rightholders shall notify the affected collective management organisation of their decision without delay . the collective management organisation which does not grant or offer to grant multi - territorial licences shall continue to grant or offer to grant licences for the online rights in musical works of such rightholders for their use in the territory of the member state where the collective management organisation is established , unless the rightholders terminate their authorisation to manage them .


### those procedures shall include an annual individual statement by each of those persons and directors , to the body entrusted with the supervisory function , containing the following information : ### those procedures shall include an annual individual statement by each of those persons referred to in paragraph 1 to the body entrusted with the supervisory function , containing the following information :


### collecting societies are expected to act in the best interests of their members . it is therefore important to provide for systems which enable members of collecting societies to exercise their membership rights by participating in the societies ' decision - making process . the representation of the different categories of members in the decision - making process should be fair and balanced . the effectiveness of the rules on the general meeting of members of collecting societies may be undermined if there were no provisions on how the general meeting should be run . thus , it is necessary to ensure that the general meeting is convened regularly , and at least annually , and that the most important decisions in the collecting society are taken by the general meeting . ### collective management organisations should act in the best collective interests of the rightholders they represent . it is therefore important to provide for systems which enable members of collecting societies to exercise their membership rights by participating in the societies ' decision - making process . the representation in the decision - making process of the different categories of members , such as producers or performers , should be fair and balanced . the effectiveness of the rules on the general assembly of members of collective management organisations would be undermined if there were no provisions on how the general assembly should be run . thus , it is necessary to ensure that the general assembly is convened regularly , and at least annually , and that the most important decisions in the collective management organisation are taken by the general assembly .


### the general meeting shall approve any amendments to the statute and the membership terms of the collecting societiy , where those terms are not regulated by the statute . ### the general meeting shall approve the statute , the membership terms and any amendments to the statute and the membership terms of the collecting society , where those terms are not regulated by the statute .


### fair commercial terms in licensing are particularly important to ensure that users can license the works and other protected subject - matter for which a collecting society represents rights and to ensure the remuneration of rightholders . collecting societies and users should therefore conduct licensing negotiations in good faith and apply tariffs determined on the basis of objective criteria . ### fair commercial terms in licensing are particularly important to ensure that users can license the works and other protected subject - matter for which a collective management organisation represents rights and to ensure the remuneration of rightholders . collective management organisations and users should therefore conduct licensing negotiations in good faith and apply tariffs determined on the basis of objective and non - discriminatory criteria .


### any restriction on the right of the members of the collecting society to participate and to exercise voting rights at the general meeting shall be fair and proportionate and be based on the following criteria : duration of membership ; amounts received or due to a member in relation to the specified financial period . ### every member of a collective management organisation shall have the right to participate in and to stand for election and vote at the general meeting , including , where appropriate , by electronic vote . any restriction on that right shall be fair and proportionate and shall be limited to the criteria based on the duration of membership .


### collecting societies collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collecting societies exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collecting societies maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collecting societies . amounts collected and due to rightholders should be managed separately from any own assets of the collecting society and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collecting societies ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collecting society should be managed in accordance with criteria which would oblige the collecting society to act prudently , while allowing the collecting society to decide on the most secure and efficient investment policy . this should allow the colleting society to opt for an asset allocation that suits the precise nature and duration of any exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collecting societies to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collecting societies of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed . ### collective management organisations collect , manage and distribute revenue from the exploitation of the rights entrusted to them by rightholders . this revenue is ultimately due to rightholders who may be members of that society , or another society . it is therefore important that collective management organisations exercise the utmost diligence in collecting , managing and distributing that revenue . accurate distribution is only possible where collective management organisations maintain proper records of membership , licences and use of works and other subject matter . where appropriate , data should also be provided by rightholders and users and verified by the collective management organisations . amounts collected and due to rightholders should be managed separately from any own assets of the collective management organisation and , if they are invested , pending their distribution to rightholders , this should be carried out in accordance with the investment policy decided by the collective management organisations ' general meeting . in order to maintain a high level of protection for the rights of rightholders and to ensure that any income which may be derived from exploitation of their rights accrues for the benefit of rightholders , the investments made and held by the collective management organisation should be managed in accordance with criteria which would oblige the collective management organisation to act prudently , while allowing the collective management organisation to decide on the most secure and efficient investment policy . this should allow the collective management organisation to opt for a secure and profitable asset allocation that prevents exposure to risk of any rights revenue invested and which does not unduly prejudice any rights revenue owed to rightholders . moreover , in order to ensure that the amounts due to rightholders are appropriately and effectively distributed , it is necessary to require collective management organisations to undertake diligent and good faith reasonable measures to identify and locate the relevant rightholders . it is also appropriate to provide for the approval by members of collective management organisations of the rules governing any situation where , due to the lack of identified or located rightholders , amounts collected cannot be distributed .


### the general meeting shall approve any amendments to the statute and the membership terms of the collecting society , where those terms are not regulated by the statute . ### the general meeting of members shall approve any amendments to the statute and the membership terms of the collective management organisation .