(3)

After Article 3, the following Chapters Ia and Ib are inserted ‘CHAPTER IA IDENTIFICATION OF SHAREHOLDERS, TRANSMISSION OF INFORMATION AND FACILITATION OF EXERCISE OF SHAREHOLDER RIGHTS Article 3a Identification of shareholders 1. Member States shall ensure that companies have the right to identify their shareholders , taking account of existing national systems . 2. Member States shall ensure that, on the request of the company, the intermediary communicates without undue delay to the company the information regarding shareholder identity. Where there is more than one intermediary in a holding chain, the request of the company shall be transmitted between intermediaries without undue delay. The intermediary having the information regarding shareholder identity shall transmit it directly to the company. Member States may provide that central security depositories (CSDs) are the intermediaries to be responsible for collecting the information regarding shareholder identity and for providing it directly to the company . 3. Shareholders shall be duly informed by their intermediary that information regarding their identity may be processed in accordance with this article and, where applicable, that the information has actually been forwarded to the company . This information may only be used for the purpose of facilitation of the exercise of the rights of the shareholder , of engagement and dialogue between the company and the shareholder on company-related matters. Companies shall in any case be allowed to give third parties an overview of the shareholding structure of the company by disclosing the different shareholder categories. The company and the intermediary shall ensure that natural and legal persons are able to rectify or erase any incomplete or inaccurate data. Member States shall ensure that the companies and the intermediaries do not store the information regarding shareholder identity transmitted to them in accordance with this Article for longer than necessary and, in any event, for longer than 24 months after the company or the intermediaries have learnt that the person concerned has ceased to be a shareholder . 4. Member States shall ensure that an intermediary that reports to the company the information regarding shareholder identity in accordance with paragraph 2 is not considered in breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision. 5. To ensure uniform application of this Article, the Commission shall be empowered to adopt delegated acts in accordance with Article 14a to specify the minimum requirements to transmit the information laid down in paragraphs 2 and 3 as regards the format of the information to be transmitted, the format of the request , including the secure formats to be used, and the deadlines to be complied with. [Am. 24] Article 3b Transmission of information 1. Member States shall ensure that if a company does not directly communicate with its shareholders, the information related to their shares shall be made available via the company’s website and transmitted to them or, in accordance with the instructions given by the shareholder, to a third party, by the intermediary without undue delay in all of the following cases: (a) the information is necessary to exercise a right of the shareholder flowing from its shares; (b) the information is directed to all shareholders in shares of that class. 2. Member States shall require companies to provide and deliver the information to the intermediary related to the exercise of rights flowing from shares in accordance with paragraph 1 in a standardised and timely manner. 3. Member States shall oblige the intermediary to transmit to the company, in accordance with the instructions received from the shareholders, without undue delay the information received from the shareholders related to the exercise of the rights flowing from their shares. 4. Where there is more than one intermediary in a holding chain, information referred to in paragraphs 1 and 3 shall be transmitted between intermediaries without undue delay. 5. To ensure uniform application of this Article, the Commission shall be empowered to adopt delegated acts, in accordance with Article 14a, to specify the minimum requirements to transmit information laid down in paragraphs 1 to 4 ▌as regards the content to be transmitted, the deadlines to be complied with and the types and format of information to be transmitted , including the secure formats to be used . Article 3c Facilitation of the exercise of shareholder rights 1. Member States shall ensure that the intermediaries facilitate the exercise of the shareholder rights by the shareholder, including the right to participate and vote in general meetings. Such facilitation shall comprise at least one of the following: (a) the intermediary makes the necessary arrangements for the shareholder or a third person nominated by the shareholder to be able to exercise themselves the rights; (b) the intermediary exercises the rights flowing from the shares upon the explicit authorisation and instruction of the shareholder and for his benefit. 2. Member States shall ensure that companies publicly disclose, via their website, the minutes of the general meetings and the results of votes. Member States shall ensure that companies confirm the votes cast in general meetings by or on behalf of shareholders, when they are cast by electronic means . In case the intermediary casts the vote, it shall transmit the voting confirmation to the shareholder. Where there is more than one intermediary in the holding chain the confirmation shall be transmitted between intermediaries without undue delay. 3. To ensure uniform application of this Article, the Commission shall be empowered to adopt delegated acts , in accordance with Article 14a , to specify the minimum requirements to facilitate the exercise of shareholder rights laid down in paragraphs 1 and 2 of this Article ▌as regards the types of the facilitation, the form of the voting confirmation and the deadlines to be complied with. ▌ Article 3d Transparency on costs 1. Member States may allow intermediaries to charge the costs of the service to be provided by the companies under this chapter. Intermediaries shall publicly disclose prices, fees and any other charges separately for each service referred to in this chapter. 2. Where intermediaries are permitted to charge costs in accordance with paragraph 1, Member States shall ensure that intermediaries publicly disclose, separately for each service, the costs for the services referred to in this chapter. Member States shall ensure that any costs that may be levied by an intermediary on shareholders, companies and other intermediaries shall be non-discriminatory , reasonable and proportionate . Any differences in the charges levied between domestic and cross-border exercise of rights shall only be permitted where duly justified and shall reflect the variation in actual costs incurred for delivering the services . Article 3e Third country intermediaries A third country intermediary who has established a branch in the Union shall be subject to this chapter.” CHAPTER IB TRANSPARENCY OF INSTITUTIONAL INVESTORS, ASSET MANAGERS AND PROXY ADVISORS Article 3f Engagement policy 1. Member States shall , without prejudice to Article 3f(4), ensure that institutional investors and asset managers develop a policy on shareholder engagement (“engagement policy”). This engagement policy shall determine how institutional investors and asset managers conduct the following actions: (a) to integrate shareholder engagement in their investment strategy; (b) to monitor investee companies, including on their non-financial performance , and reduction of social and environmental risks ; (c) to conduct dialogues with investee companies; (d) to exercise voting rights (e) to use services provided by proxy advisors; (f) to cooperate with other shareholders; (fa) to conduct dialogue and cooperate with other stakeholders of the investee companies . 2. Member States shall , without prejudice to Article 3f(4), ensure that the engagement policy includes policies to manage actual or potential conflicts of interests with regard to shareholder engagement. Such policies shall in particular be developed for all of the following situations: (a) the institutional investor or the asset manager, or other companies affiliated to them, offer financial products to or have other commercial relationships with the investee company; (b) a director of the institutional investor or the asset manager is also a director of the investee company; (c) an asset manager managing the assets of an institution for occupational retirement provision invests in a company that contributes to that institution; (d) the institutional investor or asset manager is affiliated with a company for whose shares a takeover bid has been launched. 3. Member States shall ensure that institutional investors and asset managers publicly disclose on an annual basis their engagement policy, how it has been implemented and the results thereof. The information referred to in the first sentence shall at least be available , free of charge, on the company's website. Institutional investors shall provide their clients with that information on an annual basis. Institutional investors and asset managers shall publicly disclose , for each company in which they hold shares, whether and how they cast their votes in the general meetings of the companies concerned and provide an explanation for their voting behaviour. Where an asset manager casts votes on behalf of an institutional investor, the institutional investor shall make a reference as to where such voting information has been published by the asset manager. The information referred to in this paragraph shall at least be available, free of charge, on the company's website . 4. Where institutional investors or asset managers decide not to develop an engagement policy or decide not to disclose the implementation and results thereof, they shall give a clear and reasoned explanation as to why this is the case. [Am. 25] Article 3 g Investment strategy of institutional investors and arrangements with asset managers 1. Member States shall ensure that institutional investors disclose to the public how their investment strategy (“investment strategy”) is aligned with the profile and duration of their liabilities and how it contributes to the medium to long-term performance of their assets. The information referred to in the first sentence shall at least be available , free of charge, on the company's website as long as it is applicable and shall be sent annually to the company's clients together with the information on their engagement policy . 2. Where an asset manager invests on behalf of an institutional investor, either on a discretionary client-by-client basis or through a collective investment undertaking, the institutional investor shall annually disclose to the public the main elements of the arrangement with the asset manager with regard to the following issues: (a) whether and to what extent it incentivises the asset manager to align its investment strategy and decisions with the profile and duration of its liabilities; (b) whether and to what extent it incentivises the asset manager to make investment decisions based on medium to long-term company performance, including non-financial performance, and to engage with companies as a means of improving company performance to deliver investment returns; (c) the method and time horizon of the evaluation of the asset manager’s performance, and in particular whether, and how this evaluation takes long-term absolute performance into account as opposed to performance relative to a benchmark index or other asset managers pursuing similar investment strategies; (d) how the structure of the consideration for the asset management services contributes to the alignment of the investment decisions of the asset manager with the profile and duration of the liabilities of the institutional investor; (e) the targeted portfolio turnover or turnover range, the method used for the turnover calculation, and whether any procedure is established when this is exceeded by the asset manager; (f) the duration of the arrangement with the asset manager. Where the arrangement with the asset manager does not contain one or more of the elements referred to in points (a) to (f), the institutional investor shall give a clear and reasoned explanation as to why this is the case. [Am. 26] Article 3h Transparency of asset managers 1. Member States shall ensure that asset managers disclose , as specified in paragraphs 2 and 2a, how their investment strategy and implementation thereof complies with ▌the ▌arrangement referred to in Article 3 g(2) . 2. Member States shall ensure that asset managers annually disclose to the public all of the following information: (a) whether or not, and if so how, they make investment decisions on the basis of judgements about medium-to long-term performance of the investee company, including non-financial performance; ▌ (b) the level of portfolio turnover, the method used to calculate it and an explanation if the turnover exceeded the targeted level; ▌ (c) whether or not, and if so, what actual or potential conflicts of interest have arisen in connection with engagement activities and how the asset manager has dealt with them; (d) whether or not, and if so how, the asset manager uses proxy advisors for the purpose of their engagement activities; (e) how, overall, the investment strategy and implementation thereof contributes to the medium to long-term performance of the assets of the institutional investor. 2a. Member States shall ensure that asset managers annually disclose to the institutional investor with which they have entered into the arrangement referred to in Article 3 g(2) all of the following information: (a) how the portfolio was composed and an explanation of any significant changes in the portfolio in the previous period; (b) portfolio turnover costs; (c) their policy on securities lending and the implementation thereof. 3. The information disclosed pursuant to paragraph 2 shall at least be available, free of charge, on the asset manager's website. The information disclosed pursuant to paragraph 2a shall be provided free of charge and, in case the asset manager does not manage the assets on a discretionary client-by-client basis, it shall also be provided to other investors on request. 3a. Member States may provide that, in exceptional cases, an asset manager may be allowed, if approved by the competent authority, to abstain from disclosing a certain part of the information to be disclosed under this Article if that part relates to impending developments or matters that are in the course of negotiation and its disclosure would be seriously prejudicial to the commercial position of the asset manager. Article 3i Transparency of proxy advisors 1. Member States shall ensure that proxy advisors adopt and implement adequate measures to ensure to the best of their ability that their research and voting recommendations are accurate and reliable, based on a thorough analysis of all the information that is available to them, and are developed in the sole interest of their clients . 1a. Member States shall ensure that proxy advisors refer to the code of conduct which they apply. Where they depart from any of the recommendations of that code of conduct, they shall declare it, explain the reasons for doing so and indicate any alternative measures adopted. This information, together with the reference to the code of conduct which they apply, shall be published on the proxy advisor's website. Proxy advisors shall report every year on the application of that code of conduct. Annual reports shall be published on the proxy advisor's website and shall remain available, free of charge, for at least three years after the date of publication 2. Member States shall ensure that proxy advisors shall on an annual basis publicly disclose all of the following information in relation to the preparation of their research and voting recommendations: (a) the essential features of the methodologies and models they apply; (b) the main information sources they use; (c) whether and, if so, how they take national market, legal, regulatory and company-specific conditions into account; (ca) the essential features of the research undertaken and voting policies applied for each market; (d) whether they have communication or dialogues with the companies which are the object of their research and voting recommendations and their stakeholders , and, if so, the extent and nature thereof; (da) the policy regarding prevention and management of potential conflicts of interest; (e) the total number and the qualifications of staff involved in the preparation of the voting recommendations; (f) the total number of voting recommendations provided in the last year. That information shall be published on the website of proxy advisors and remain available , free of charge, for at least three years from the day of publication. 3. Member States shall ensure that proxy advisors identify and disclose without undue delay to their clients ▌any actual or potential conflict of interest or business relationships that may influence the research and the preparation of the voting recommendations and the actions they have undertaken to eliminate or mitigate the actual or potential conflict of interest.’