Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on multiple-vote share structures in companies that seek the admission to trading of their shares on an SME growth market
Date: 2022-12-07
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: financial legislation, protection of shareholders, public limited company, share, shareholder, shareholding, small and medium-sized enterprises, stock-exchange listing

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   EUROPEAN COMMISSION  Brussels, 7.12.2022  COM(2022) 761 final 2022/0406 (COD)  Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on multiple-vote share structures in companies that seek the admission to trading of their shares on an SME growth market (Text with EEA relevance)  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

This  proposal  is  part  of  the  Listing  Act  package,  a  set  of  measures  to  make  public  capital 
markets  more  attractive  for  EU  companies  and  facilitate  access  to  capital  for  small  and 
medium-sized  companies  (SMEs).  It  is  in  line  with  the Capital  Markets  Union  (CMU)  core 
aim to improve access to market-based sources of financing for EU companies at each stage 
of  their  development,  including  for  smaller  companies.  Listed  companies  often  outpace 
privately owned companies in terms of annual revenue growth and job creation. By listing on 
public markets, companies can diversify their investor base, reduce their dependency on bank 
financing, gain easier access to additional equity capital and debt finance (through secondary 
offers), raise their public profile and increase brand recognition. 

Since the publication of the first CMU action plan in 2015, progress has been made to make it 
easier  and  cheaper  for  companies,  in  particular  SMEs,  to  access  public  markets.  In  January 
2018,  the  Markets  in  Financial  Instruments  Directive  II  (MiFID  II)1 introduced  a  new 
category  of  multilateral  trading  facilities  (MTFs),  the  SME  growth  markets,  to  incentivise 
SMEs to access capital markets2. In 2019, new EU rules were put forward to cut red tape and 
reduce  regulatory  burden  for  companies  listing  on  SME  growth  markets  while  preserving  a 
high  level  of  investor  protection  and  market  integrity3. Nevertheless,  despite  the  changes 
introduced,  stakeholders  continue  to  argue  that  further  regulatory  action  is  needed  to 
streamline  the  listing  process  and  make  it  more  flexible  for  issuers.  The  new  CMU  action 
plan, adopted in September 2020, announced that ‘in order to promote and diversify small and 
innovative  companies’  access  to  funding,  the  Commission  will  seek  to  simplify  the  listing 
rules for public markets’. Following up on this and building on Regulation (EU) 2019/2115, 
the  Commission  set  up  a  Technical  Expert  Stakeholder  Group  (TESG)  on  SMEs  that 
confirmed stakeholders’ concerns that further legislative action is needed to support listing of 
companies,  especially  of  SMEs.  In  its  final  report  of  May  2021,  the  TESG  made  12 
recommendations to amend the listing framework both on regulated markets and SME growth 
markets4. 
On 15 September 2021, President von der Leyen announced in her letter of intent5 addressed 
to the Parliament and the Presidency of the Council a legislative proposal to facilitate SMEs’ 
access to capital, which has been included in the 2022 Commission work programme6. 

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Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 on  markets  in 
financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (OJ L 173 
12.6.2014, p. 349)  
For  an  MTF  to  qualify  as  an  SME  growth  market,  at  least  50%  of  the  issuers  whose  financial 
instruments  are  traded  on  the  MTF  need  to  be  SMEs,  defined  under  MiFID  II  as  companies  with  an 
average market capitalisation of less than EUR 200 million (See Recital 132 of MiFID II). In order to 
ensure the appropriate level of investor protection, the listing rules on SME growth markets must also 
satisfy  certain  quality  standards,  including  the  need  to  draw  up  an  appropriate  admission  document 
(when a prospectus is not required) and to comply with periodic financial reporting. The SME growth 
market framework was developed to further acknowledge the special needs of SMEs entering the equity 
and bond markets for the first time. 
Regulation  (EU)  2019/2115  of  the  European  Parliament  and  of  the  Council  of  27  November  2019 
amending Directive 2014/65/EU and Regulations (EU) No 596/2014 and (EU) 2017/1129 as regards the 
promotion of the use of SME growth markets (OJ L 320, 11.12.2019, p. 1–10). 
Final  report  of  the  Technical  Expert  Stakeholder  Group  (TESG)  on  SMEs  -  Empowering  EU  capital 
markets - Making listing cool again (europa.eu). 
See p. 4: state_of_the_union_2021_letter_of_intent_en.pdf (europa.eu). 

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A  company’s  decision  to  list  is  a  complex  one  and  is  influenced  by  a  multitude  of  factors, 
many of which are outside the reach of regulators and therefore cannot be addressed directly 
by  a  legislative  intervention.  For  instance,  the  features  of  the  ecosystem  that  determine  the 
cost  of  listing  services,  geopolitical  instability,  Brexit,  COVID-19,  central  bank  policy  and 
inflation  –  have  all  had (and  will  continue  to  have)  an  impact  on  whether  to  list,  when  and 
where  to  list,  and  whether  to  remain  listed  in  the  EU.  Regulatory  requirements  and  the 
associated costs and burden, however, are also important factors in a company’s  decision to 
list and remain listed. The Listing Act package presents a targeted set of measures aiming to: 
(i) reduce the regulatory burden where it is considered to be excessive (i.e. where regulation 
could  contribute  to  investor  protection/market  integrity  in  a  more  cost-efficient  manner  for 
stakeholders);  and  (ii)  increase  the  flexibility  given  under  company  law  to  companies’ 
founders/controlling shareholders to choose how to distribute voting rights after the admission 
to trading of shares. 

The  regulatory  framework  applying  to  the  listing  process  is  multifaceted.  Companies  must 
comply with regulatory requirements before, during and after the initial public offering (IPO). 
This  proposal  focuses  on  the  regulatory  barriers  that  emerge  at  the  pre-IPO  phase  and 
concerns  the  unequal  opportunities  of  companies  across  the  EU  to  choose  the  appropriate 
governance  structures  when  listing.  The  proposed  Directive  is  accompanied  by  two  other 
legislative proposals: (i) a proposal for a Regulation amending the Prospectus Regulation7, the 
Market  Abuse  Regulation  (MAR)8, (ii)  the  Markets  in  Financial  Instruments  Regulation 
(MiFIR)9 and (iii) a proposal for a Directive repealing the Listing Directive10 and amending 
MiFID  II.  Both  proposals  aim  to  streamline  and  clarify  disclosure  requirements  applying  to 
primary and secondary markets while maintaining an appropriate level of investor protection 
and  market  integrity.  The  proposed  Directive  repealing  the  Listing  Directive  and  amending 
MiFID II also seeks to increase the low level of investment research on SMEs. 

One  of  the  main  issues  that  deters  founders  and  families  from  deciding  to  go  public  (at  the 
pre-IPO stage) is the fear of losing control over their company once it is listed. Listing entails 
diluting ownership, thus reducing founders and families’ control over important investments 
in  and  operating  decisions  of  the  company.  Companies,  in  particular  SMEs,  may  be  more 
likely to list on public markets if controlling shareholders can retain decision-making power 
in the company after listing. This lets them continue to shape the business according to their 
strategic vision while enjoying the advantages linked to being a publicly listed company and 
raising enough funds that justify having gone through the listing process. This is particularly 
the  case  for  smaller  family-owned  companies,  start-ups,  and  businesses  with  long-term 
projects that require significant upfront  costs. All these companies can run the risk of being 
overly  exposed  to  fluctuations  of  public  markets  or  the  threat  of  a  hostile  takeover.  These 
companies would also benefit the most from listing on an SME growth market – a category of 

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10 

Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  Commission  work  programme 
2022 Making Europe stronger together COM (2021) 645 final cwp2022_en.pdf (europa.eu).  
Regulation  (EU)  2017/1129  of  the  European  Parliament  and  of  the  Council  of  14  June  2017  on  the 
prospectus  to  be  published  when  securities  are  offered  to  the  public  or  admitted  to  trading  on  a 
regulated market, and repealing Directive 2003/71/EC (OJ L 168 30.6.2017, p. 12. 
Regulation  (EU)  No  596/2014  of  the  European  Parliament  and  of  the  Council  of  16  April  2014  on 
market  abuse  and  repealing  Directive  2003/6/EC  of  the  European  Parliament  and  of  the  Council  and 
Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC (OJ L 173 12.6.2014, p. 1). 
Regulation  (EU)  No  600/2014  of  the  European  Parliament  and  of  the  Council  of  15  May  2014  on 
markets in financial instruments and amending Regulation (EU) No 648/2012. 
Directive 2001/34/EC of the European Parliament and of the Council of 28 May 2001 on the admission 
of  securities  to  official  stock  exchange  listing  and  on  information  to  be  published  on  those  securities 
(OJ L 184, 6.7.2001, p.1) 

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MTFs  designed  specifically 
less 
for  SMEs  and  where 
stringent regulatory  requirements.  Smaller  companies  may  be  in  greater  need  of  diversified 
funding than larger companies due to their typically riskier profile, reduced visibility vis-à-vis 
potential investors, inability to afford to list abroad as well as, in some cases, a greater need to 
scale  up.  Therefore,  given  that  the  access  to  public  markets  is  particularly  important  for 
smaller  and  fast-growing  companies,  the  focus  of  this  proposal  is  on  companies  listing  on 
SME growth markets. 

they  can  benefit 

from 

Multiple-vote  share  structures  are  an  effective  mechanism  to  allow  companies’  owners  to 
retain  decision-making  powers  in  a  company  while  raising  funds  on  public  markets.  These 
share structures permit a shareholder (or a group of shareholders) to hold a controlling stake 
in a company without having to make the proportionate economical investment required for 
the  size  of  the  stake,  should  all  shares  have  the  same  voting  power.  Multiple-vote  share 
structures typically include at least two distinct and separate classes of shares with a different 
number of voting rights attached to the shares belonging to each class. 

Multiple-vote  share  structures  are  only  one  among  the  existing  control  enhancing 
mechanisms,  i.e.  mechanisms  generating  a  discrepancy  in  the  relation  between  financial 
ownership and voting power with the result that a shareholder can increase its control without 
holding  a  proportional  stake  of  equity.  The  study  on  the  proportionality  between  ownership 
and control in Member States11, published in 2007, showed that the available mechanisms to 
enhance/lock in  control  by leveraging voting power may also  include, among others  loyalty 
shares12, non-voting shares13, non-voting preference shares14, and voting right ceilings15. 

Nevertheless,  being  more  rigid  in  their  set-up,  most  of  these  alternative  share  structures 
constrain  the  amount  of  funds  that  can  be  raised  at  the  IPO  stage  and  through  follow-on 
issuances.  Furthermore,  loyalty  shares  are  an  enhanced  control  mechanism  that  is  designed 
specifically to foster long-term shareholding among investors and lead to a more stable, long-
term  oriented  ownership  rather  than  to  increase  the  attractiveness  of  raising  funds  from  the 
public.  Since  loyalty  shares  are  typically  associated  with  less  additional  voting  rights  than 
multiple-vote  right  shares  for  controlling  shareholders  and  since  they  usually  require  a 
holding period before activating the enhanced voting rights, they are considered less attractive 
by founders and family-owned companies. This  is  supported by empirical  evidence that has 
demonstrated  that  the  introduction  of  loyalty  shares  in  certain  Member  States  has  not 
increased  the  amount  of  companies  that  access  public  markets.  By  contrast,  multiple-vote 
shares  would  allow  founders  to  retain  control,  while  selling  a  larger  portion  of  their 
investment in the company thanks to the greater disassociation between economic interest and 
voting rights. 

The introduction of multiple-vote share structures in a company results in other shareholders 
(investors)  having  less  decision-making  power  relative  to  their  economic  investments.  This 

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https://ecgi.global/sites/default/files/study_report_en.pdf. 
Loyalty  shares  are  shares  that  give  enhanced  voting  power  to  shareholders  that  have  held  them  for  a 
specified  time  period.  Typically,  loyalty-shareholders  get  two  votes  per  share,  instead  of  one  vote,  if 
they have held their shares for two years or more. 
Non-voting shares are shares with no voting rights and which carry no special cash-flow rights (such as 
a preferential dividend) to compensate for the absence of voting rights. 
Non-voting preference shares are non-voting shares issued with special cash-flow right to compensate 
for the absence of voting rights (such as a preferential (higher or guaranteed) dividend). 
A  voting  right  ceiling  is  a  restriction  prohibiting  shareholders  from  voting  above  a  certain  threshold, 
irrespective  of  the  number  of  voting  shares  they  hold.  Voting  right  ceilings  can  be  expressed  as  a 
percentage of all outstanding voting rights (for example, when no shareholder may vote for more than 
three percent of the company’s registered share capital) or as a percentage of all votes cast at a general 
meeting (common across Member States). 

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diminished  voting  power  could  lead  to  specific  problems  if  not  properly  mitigated.  Such 
problems  could  include,  for  example,  shareholder  entrenchment16,  the  funnelling  of 
company’s  assets  and,  in  general,  the  extraction  of  private  benefits  by  the  controlling 
shareholder, through for example related party transactions. Moreover, the diluting effect of 
multiple-vote  shares  may  result  in  controlling  shareholders  blocking  certain  resolutions, 
including  those  aimed  at  sustainability  goals,  thus  fostering  the  interests  of  the  controlling 
shareholder  rather  than  the  long-term  sustainable  development  of  the  company.  However, 
these potential problems can be addressed by putting in place safeguards aimed at protecting 
minority  shareholders  and  the  interests  of  the  company,  such  as  a  maximum  voting  ratio, 
sunset  clauses  and  limitation  to  the  use  of  the  multiple-vote  shares  in  certain  cases,  for 
example when it comes to sustainability matters. 

There  is  currently  fragmentation  in  the  EU  as  regards  multiple-vote  share  structures,  which 
leads to unequal opportunities for EU companies when deciding to list. Some Member States, 
such as Sweden or Denmark, have allowed multiple-vote shares since almost the beginning of 
their  capital  markets.  In  Sweden,  the  percentage  of  listed  companies  with  these  share 
structures has  always  remained above 40%, and in  Finland and Denmark they  represent  the 
majority  of  publicly  listed  companies  in  terms  of  market  capitalisation.  In  contrast,  other 
Member States have banned multiple-vote shares. In some cases, the ban is limited to public 
companies, for instance in Germany and Belgium, while in others it applies to all companies, 
for instance in Austria and Croatia. 

The  existing  differences  in  national  regimes  on  multiple-vote  share  structures  create  an 
uneven playing field for companies in different Member States. Entrepreneurs and companies 
from  Member  States,  that  prohibit  multiple-vote  share  structures,  are  at  a  comparative 
disadvantage with companies from Member States that permit multiple-vote share structures. 
Entrepreneurs and companies looking to introduce multiple-vote share structures and benefit 
from the flexibility are faced with a choice of remaining private or moving to another Member 
State (or a non-EU country), thus restricting their choice of funding and increasing their cost 
of  capital.  This  affects,  in  particular,  SMEs  and  early-stage  start-ups  that  lack  resources  to 
cover  the  additional  costs  associated  with  listing  in  another  Member  State  or  in  a  non-EU 
country. 

This  proposal  seeks  to achieve  a  minimum  harmonisation of national laws on multiple-vote 
share  structures  of  companies  listing  on  SME  growth  markets,  while  leaving  sufficient 
flexibility  to  Member  States  for  its  implementation.  While  regulated  markets  are  generally 
more  suitable  for  larger  and  more  mature  companies,  SME  growth  markets  were  largely 
designed for listing of smaller companies, whereby the regulatory treatment of SME growth 
markets takes the particularities of SMEs into account. Nevertheless, not all companies with 
securities  listed  on  SME  growth  markets  are  SMEs.  Companies  other  than  SMEs  generally 
have more liquid securities and hence their inclusion allows SME growth markets to generate 
higher trading fees  to  maintain profitability of their business  model. Nevertheless, to  ensure 
clarity  for  investors,  all  issuers  on  SME  growth  markets,  irrespective  of  their  size,  are 
currently  subject  to  the  same  rules.  In  line  with  this  approach,  this  proposal  introduces  the 
possibility  to  adopt  multiple-vote  share  structures  for  all  companies  seeking  admission  to 
trading of their shares on an SME growth market for the first time. 

This  proposal  provides for safeguards to  ensure  protection of minority  shareholders and the 
interests  of  the  company.  Those  safeguards  require  all  Member  States  to  ensure  that  any 

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A shareholder entrenchment is a situation where the controlling shareholders have perpetual control and 
can therefore take decisions for their own benefit without considering the interests of the company and 
of other shareholders and where other shareholders cannot effectively challenge these decisions. 

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decision to adopt a multiple-vote share structure, or to modify that structure where there is an 
impact  on  voting  rights,  is  taken  by  a  qualified  majority  at  the  general  shareholders’ 
meeting. The  safeguards  set  out  in  this  proposal  also  introduce  a  limitation  on  the  voting 
weight of multiple-vote shares by introducing restrictions either on the design of the multiple-
vote share structure or on the exercise of voting rights attached to multiple vote shares for the 
adoption of certain decisions. These safeguards are designed to protect the interest of minority 
shareholders  and  the  interests  of  the  company,  while  at  the  same  time  allowing  sufficient 
flexibility to controlling shareholders so as to not disincentivise the use of multiple-vote share 
structures. Furthermore, these safeguards are largely in line with those already in existence in 
the  legal  systems  of  the  Member  States  with  well-functioning  multiple-vote  share  structure 
regimes.  Thus,  those  Member  States  would  require  minimum  adjustments  to  their  current 
legal systems. 

• 

Consistency with existing policy provisions in the policy area 

Multiple-vote share structures are currently exclusively regulated at national level. 

The  proposed Directive  is  consistent  with  the  objectives  of  existing  EU  legislation  laying 
down  requirements  for  public  companies  and  coordinating  national  provisions  in  company 
law.  This  includes  the  Company  Law  Directive17 that  aims  to  ensure  minimum equivalent 
protection  for  both  shareholders  and  creditors.  It harmonises  national  provisions  on  certain 
aspects  of  company  law,  such  as  setting  up  public  limited  liability  companies,  share  capital 
requirements and distributions to shareholders. The scope of the proposed Directive does not 
overlap  with  the  scope  of  the  Company  Law  Directive,  which  does  not  regulate  the  share 
structures  of  companies  (including  multiple-vote  share  structures).  Instead,  this  matter  is 
addressed in this proposal. 

Furthermore, by requiring Member States to put in place provisions to safeguard the interests 
of  the  company  and  of  minority  shareholders,  the  proposal  is  consistent  with  the  policy 
objective pursued in Directive (EU) 2017/82818, including fostering the long-term sustainable 
development  of  companies  and  protecting  the  interests  of  the  company  and  its  minority 
shareholders  in  the  case  of  related  party  transactions,  despite  the  difference  in  scope  of  the 
two  acts  (the  Directive  concerns  shareholder  rights  in  companies  admitted  to  trading  on 
regulated markets,  whereas this proposal  concerns shareholder rights  in companies admitted 
to trading on SME growth markets). 

Similarly,  the  proposed  Directive  does  not  overlap  with  the  scope  of  the  Takeover  Bid 
Directive that lays down rules applicable to public companies, when such companies are the 
subject of takeover bids, in order to safeguard the interests of shareholders. Importantly, the 
Takeover Bid Directive19 only applies to companies admitted to trading on a regulated market 
and not to companies admitted to trading on an SME growth market, which are in the scope of 
this proposal. Nevertheless, transparency provisions in this proposal pursue similar objectives 
to  those  in  the  Takeover  Bid  Directive,  focusing  on  a  company’s  share  capital  structure, 
shareholding structure as well as rights and obligations attached to the company’s securities. 

Lastly,  the  proposed  Directive  is  in  line  with  the  provisions  of  MiFID  II  regulating  SME 
growth markets. 

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Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to 
certain aspects of company law (codification) (OJ L 169 30.6.2017, p. 46). 
Directive  (EU)  2017/828  of  the  European  Parliament  and  of  the  Council  of  17  May  2017  amending 
Directive  2007/36/ec  as  regards  the  encouragement  of  long-term  shareholder  engagement  (OJ  l  132, 
20.5.2017, p. 1–25). 
Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids 
(OJ L 142 30.4.2004, p. 12). 

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• 

Consistency with other Union policies 

The proposal is fully in line with the CMU core aim to make financing more accessible to EU 
companies  and in  particular to  SMEs.  It  is  consistent with  a number of legislative and non-
legislative  actions  taken  by  the  Commission  in  the  framework  of  the  2015  CMU  Action 
Plan20, 2017 Mid-term Review of the CMU Action Plan21 and 2020 CMU Action Plan. 

In order to  support jobs  and growth  in  the EU,  facilitating access  to  finance for companies, 
especially SMEs, has been a key goal of the CMU from the outset. Since the publication of 
the CMU Action Plan in 2015, some targeted actions were taken to develop adequate sources 
of funding for SMEs through all their stages of development. In its Mid-term Review of the 
CMU Action Plan published in June 2017, the Commission chose to raise its level of ambition 
and  strengthened  its  focus  on  the  SMEs’  access  to  public  markets.  In  May  2018,  the 
Commission  published  a  proposal  to  promote  the  use  of  SME  growth  markets22  aiming  to 
reduce the administrative burden and the high compliance costs faced by SME growth market 
issuers  while  ensuring  a  high  level  of  market  integrity  and  investor  protection;  foster  the 
liquidity  of  publicly  listed  SME  shares  to  make  these  markets  more  attractive  for  investors, 
issuers  and  intermediaries;  and  facilitate  the  registration  of  MTFs  as  SME  growth  markets. 
The proposal to promote the use of SME growth markets was adopted in November 2019. 

Furthermore, following the COVID-19 crisis, the Commission published the Capital Markets 
Recovery  Package,  which  comprised  targeted  amendments  to  capital  markets  and  bank 
regulation,  with  the  overarching  aim  to  make  it  easier  for  capital  markets  to  support  EU 
businesses to recover from the COVID-19 crisis. The suggested changes to the capital market 
rules aimed in  particular to  alleviate regulatory burden and complexity for investment  firms 
and issuers. 

This proposal follows up on the 2020 CMU Action Plan and its objective to make financing 
more  accessible  to  EU  companies  (Action  2  ‘supporting  access  to  public  markets’).  The 
proposal  focuses  on  alleviating  the  regulatory  requirements  that  can  deter  a  company  from 
deciding to list or to remain listed. Other factors that may deter issuers from listing, such as a 
narrow investor base and a more favourable tax treatment of debt over equity, are addressed 
by  other  ongoing  and  upcoming  CMU  initiatives  that  complement  the  amendments  put 
forward  in  this  proposal  and  should  be  analysed  in  conjunction  with  this  initiative.  These 
initiatives relate, for example, to (i) the creation of an EU Single Access Point (ESAP)23 that 
will tackle the lack of accessible and comparable data for investors, making companies more 
visible to investors, (ii) the centralisation of EU trading information in a consolidated tape24 
for a more efficient public market trading landscape and price discovery, (ii) the introduction 

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and 

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final 

Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions, Action Plan on Building a Capital 
Markets Union (COM(2015) 468 final). 
Communication from the Commission on the mid-term review of the capital markets union action plan 
2017) 
SWD(2017) 
(SWD(2017) 
https://ec.europa.eu/info/sites/info/files/communication-cmu-mid-term-review-june2017_en.pdf  
Proposal for a Regulation of the European Parliament and of the Council amending Regulations (EU) 
No  596/2014  and  (EU)  2017/1129  as  regards  the  promotion  of  the  use  of  SME  growth  markets 
(COM(2018) 331 final). 
Proposal for a Regulation of the European Parliament and of the Council establishing a European single 
access  point  providing  centralised  access  to  publicly  available  information  of  relevance  to  financial 
services, capital markets and sustainability (COM/2021/723 final). 
Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 
600/2014  as  regards  enhancing  market  data  transparency,  removing  obstacles  to  the  emergence  of  a 
consolidated tape, optimising the trading obligations and prohibiting receiving payments for forwarding 
client orders (COM/2021/727 final). 

June 

final 

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of  a  debt-equity  bias  reduction  allowance  (DEBRA)25  to  make  equity  financing  more 
attractive (and less costly) for companies. 

Furthermore, a series of the Commission initiatives will further strengthen the investor base 
for  listed  equity.  The  EU  SME  IPO  Fund  will  play  the  role  of  an  anchor  investor  to  attract 
more private investment in SMEs’ public equity by partnering with institutional investors and 
investing in funds focused on SME issuers. The CRR and Solvency II reviews will increase 
the investor base for issuers by facilitating investments from banks and insurance companies 
in public (long-term) equity. 
This proposal is also in line with the New European Innovation Agenda26 published in 2022, 
since it would make capital markets more attractive to company founders, without the need of 
having to relinquish control when listing in public markets.  

The proposal takes into account the evidence behind the opinion of the Fit for Future Platform 
on  facilitating  SMEs’  access  to  capital  and  in  particular  on  simplification  of  the  procedures 
for the admission to trading of securities of SMEs and other listing obligations.  

As this proposal will allow more SMEs to access more and more diversified funding through 
listing on SME growth markets, based on the most suitable corporate governance structure, it 
will also be in line with the objective of the SME relief package announced by President von 
der Leyen in the State of the Union speech in September 2022. 

Finally,  the  provisions  of  the  proposal  on  safeguards  also  cater  for  the  protection  of  the 
interests  of  the  company  against  decisions  creating  risks  for  or  resulting  in  adverse human 
rights, climate change and environmental consequences. The proposal is therefore in line with 
the  Commission’s  corporate  governance  policy  objective  of  fostering  sustainable  and 
responsible  corporate  behaviour,  and  hence  in  line  with  the  Commission  proposal  for  the 
Directive on Corporate Sustainability Due Diligence27, which aims at anchoring human rights 
and environmental considerations in companies’ corporate governance systems. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The proposal is based on Article 114 and Article 50 of the Treaty on the Functioning of the 
European Union (TFEU). 

Article 114 provides for adopting measures for the approximation of the provisions laid down 
by law, regulation  or administrative action in  Member States which have as their object  the 
establishment  and  functioning  of  the  internal  market.  Recourse  to  Article  114  is  possible 
where disparities between national rules are such as to obstruct the fundamental freedoms or 
create  distortions  of  competition  and  thus  have  a  direct  effect  on  the  functioning  of  the 
internal market. The objective of the proposed Directive is to remove obstacles to the exercise 
of fundamental freedoms, such as the free movement of capital and freedom of establishment. 
These obstacles result from differences between national company laws across the EU, insofar 
as  some  Member  States  prevent  their  companies  from  accessing  public  markets  through 

25 

26 

27 

Proposal for a Council Directive on laying down rules on a debt-equity bias reduction allowance and on 
limiting the deductibility of interest for corporate income tax purposes (COM/2022/216 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  -  A  New  European  Innovation 
Agenda (COM/2022/332 final). 
Proposal for a Directive of the European Parliament and of the Council on Corporate Sustainability Due 
Diligence and amending Directive (EU) 2019/1937 (COM/2022/71 final).  

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multiple-vote share structures. This restricts their access to capital and creates an obstacle to 
establishing a single market for capital in the EU. 

Article 50(1) TFEU and, in particular, Article 50(2)(g) provide for the EU’s power to act to 
attain freedom of establishment for a particular activity, in particular ‘by coordinating to the 
necessary  extent  the  safeguards  which,  for  the  protection  of  the  interests  of  members  and 
others,  are  required  by  Member  States  of  companies  or  forms  within  the  meaning  of  the 
second paragraph of Article 54 with a view to making such safeguards equivalent throughout 
the Union’. The proposed Directive seeks to put  in  place  coordination measures  concerning 
the  protection  of  interests  of  companies’  shareholders  and  other  stakeholders  to  lower 
disparities between national rules and lower obstacles to the freedom of establishment. 

• 

Subsidiarity (for non-exclusive competence) 

Under Article 4 TFEU, EU action for completing the internal market has to be appraised in 
light  of  the  subsidiarity  principle  set  out  in  Article  5(3)  of  the  Treaty  on  European  Union 
(TEU).  According  to  the  principle  of  subsidiarity,  action  at  EU  level  should  be  taken  only 
when the objectives of the proposed action cannot be achieved sufficiently by Member States 
alone and thus require action at EU level. On multiple-vote shares, unless action is taken at 
the  EU  level,  it  is  unlikely  that  Member  States,  which  currently  do  not  allow  these  share 
structures,  would  unilaterally  and  with  no  external  incentive  amend  their  rules  in  the  near 
future.  This  is  largely  due  to  historical  reasons,  opposition  from  stakeholders  in  those 
countries  and  the  fact  that  changing  company  law,  which  was  developed  over  centuries,  is 
often  difficult.  Any  delays  in  introducing  these  structures  throughout  the  EU  would  risk 
continuing to deprive smaller companies of funding opportunities in those Member States that 
ban  multiple-vote  shares.  Finally,  even  if  Member  States  decided  to  take  action,  the 
approaches could differ significantly, potentially leading to further fragmentation. 

• 

Proportionality 

The objective of the proposed Directive is to contribute to the proper functioning of the single 
market  and  remove  obstacles  to  the  exercise  of  fundamental  freedoms,  such  as  the  free 
movement  of  capital  and  the  freedom  of  establishment.  These  obstacles  are  caused  by 
differences between national company law regimes on share structures and, in particular, the 
ability of a company to  adopt  a multiple-vote share structure. To achieve this  objective, the 
proposal only sets out minimum harmonisation requirements and only in relation to the main 
principle  of  law  on  allowing  for  multiple-vote  share  structures,  supplementing  it  with 
minimum safeguards necessary to protect minority shareholder interests and the interest of the 
company. Its scope is also limited to SME growth markets, in particular to cover SMEs that 
would benefit the most from such a measure. 

The proposed Directive leaves Member States sufficient flexibility to frame the provisions of 
the  proposal  within  the  national  legal  regime.  It  does  so  by  supplementing  the  rules  with 
additional measures, including safeguards for shareholders and the interests of the company, 
provided that they are in line with the objectives of this Directive, or allowing for multiple-
vote share structures in  situations outside the scope of this proposal.  Therefore, in  line with 
the principle of subsidiarity, as set out in Article 5 of the TEU, the proposed Directive does 
not go beyond what is necessary in order to achieve its objectives. 

• 

Choice of the instrument 

The  integration  of  the  EU  single  market  in  the  area  of  company  law,  particularly  share 
structures,  can  be  best  achieved  by  approximating  laws  through  harmonisation  through  a 
directive. Using a directive respects Member States’ different legal cultures and company law 

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systems  and  provides  for  sufficient  flexibility  in  the  transposition  process  to  implement 
common minimum standards in a compatible way with those different systems. 

A recommendation would not be able to achieve the desired approximation objective in this 
policy  area  where  wide  differences  in  Member  States’  binding  legislation  were  identified. 
Furthermore,  approximation  through  a  regulation  would  not  give  enough  flexibility  to 
Member  States  to  adapt  to  local  conditions  and  keep  the  EU  rules  consistent  with  broader 
national company law. 

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

Not applicable. 

• 

Stakeholder consultations 

In  recent  years,  the  Commission’s  continuous  evaluations  have  focused  on  companies’, 
especially  SMEs’,  access  to  public  markets.  Issues  relating  to  the  regulatory  burden  on 
companies  when  accessing public markets  were  raised in  the context  of the CMU HLF, the 
TESG  and  the  2020  CMU  action  plan.  The  Commission  also  took  into  account  extensive 
research  on  the  topic  carried  out  in  the  Oxera  study28.  To  obtain  further  evidence  on  these 
issues, a call for evidence as well as a public and a targeted consultation on the Listing Act 
were  launched  in  November  2021.  The  consultations  were  open  for  14  weeks  (between  19 
November 2021 and 25 February 2022). 

The Commission also organised two technical meetings/workshops with industry stakeholders 
in April 2022 to further refine the policy options under consideration. 

Furthermore, the Commission presented the proposal’s objectives to the European Securities 
Committee Expert Group on 15 October 2021, 17 May 2022 and 30 May 2022. 

A meeting was  also  organised with  the coordinators of the Economic and Monetary Affairs 
Committee  (ECON)  of  the  European  Parliament  to  present  the  proposal’s  objectives  on  17 
May 2022. 

Finally,  a  meeting  with  the  Company  Law  Expert  Group  was  organised  on  12  September 
2022. 

Public and targeted consultations 

In the public and targeted consultations, respondents stressed that one of the key reasons for 
the wave of hi-tech, high growth issuers choosing to list in non-EU countries (such as the US 
or  the  UK)  is  the  flexibility  that  these  jurisdictions  grant  to  issuers  on  multiple-vote 
shares29. Similarly,  some  respondents30  highlighted  that  a  number  of  EU  companies  have 
recently  transferred  their  statutory  seats  from  countries  with  limited  possibilities  for  issuing 
multiple-vote  shares  (e.g.  Italy,  Germany  and  Spain)  to  the  Netherlands,  a  country  that 
adopted a permissible and flexible approach to multiple-vote share structures31. Lastly, 64 % 

28        Oxera  Consulting  LPP,  Primary  and  secondary  equity  markets  in  EU,  Final  report,  November 

29 

30 
31 

2020, Oxera-study-Primary-and-Secondary-Markets-in-the-EU-Final-Report-EN-1.pdf 
Stakeholders  supporting  this  view  include  investment  banks,  securities  market  associations,  finance 
ministries’ representatives and private equity associations. 
This was mentioned by two stakeholders from the Netherlands. 
So  far  there  are  a  few  companies  which  moved  to  the  Netherlands  to  list  there  because  of  the 
attractiveness of the multiple-vote share system. However, there is no available data to corroborate this. 

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of respondents saw merit in stipulating in EU law that issuers across the EU may list on an 
EU trading venue based on the multiple-vote share structure. 
The  majority  of  respondents  to  the  consultation  (83 %)32  considered  that,  where  it  is 
permitted,  the  use  of  multiple-vote  shares has  effectively  encouraged  more  firms  to  seek 
listing on public markets. When asked about the impact that multiple-vote shares has on the 
attractiveness of  a  company  for investors, most  respondents  to  this  question (predominantly 
issuers  and  exchanges)  considered  that  the  impact  is  either  positive  or  neutral33. These 
respondents noted that multiple-vote shares do not decrease investors’ appetite, provided that 
certain  safeguards  are  in  place,  and  highlighted  that  transparency  is  key  to  making  sure 
investors can make fully informed investment decisions. 

Those respondents who viewed the attractiveness negatively (including two NCAs and some 
investor  associations)  expressed  concerns  about  the  disappearance  of  the  ‘one  share  –  one 
vote’  principle.  One  respondent  noted,  in  particular,  that  multiple-vote  share  structures  may 
undermine  existing  accountability  mechanisms  in  corporate  governance  law,  such  as 
shareholders’ ability to elect directors, and lead to management entrenchment. However, even 
amongst  respondents  viewing  the  impact  slightly  negatively  or  negatively,  some  noted  that 
multiple-vote  shares  are  beneficial  in  certain  situations  (particularly  for  high-growth, 
innovative, founder-led companies looking to list). They noted that any changes put forward 
should  strike  an  appropriate  balance.  This  balance  should  cater  for  adequate  governance 
protection, such as limiting the decisions that can be taken with additional voting rights, allow 
founder-led companies to raise funds on public market, and maintain the founder’s long-term 
vision for the company. 

The respondents thus highlighted that any flexibility on multiple-vote share structures should 
be  approached  in  a  way  that  safeguards  governance  standards  (possibly  through  sunset 
clauses, non-transferability provisions, automatic cancellation/conversion on exit, etc.). 

Expert group recommendations 

The CMU HLF recommended that companies should have a choice to opt for a multiple-vote 
share  structure  when  going  public.  The  expert  group  noted  that  such  structures  would  help 
companies  avoid  being  taken  over  by  larger  companies,  incentivise  owners  to maintain 
growth,  and  help  foster  a  long-term  outlook  for  the  company  while  keeping  listing  an 
attractive funding option. However, they emphasised that this needs to be balanced against the 
fact  that  it  prevents  other  shareholders  from  exercising  their  stewardship  and  governance 
responsibilities. 

The TESG fully supported this recommendation, arguing that it should be the prerogative of 
the issuers to decide whether or not to include a sunset clause or a maximum weighted voting 
ratio. 

Stakeholder meetings 

The  two  technical  stakeholder  workshops  that  the  Commission  organised  did  not  generate 
significant input on the topic of multiple-vote shares. Some stakeholders (exchanges) clearly 
supported  EU  harmonisation  as  it  would  make  listing  more  attractive.  In  contrast,  other 
stakeholders  (investors)  believed  that  there  is no  need  for  such  harmonisation,  while  noting 
that, if such an approach is considered, appropriate safeguards would be important. 

32 
33 

i.e. 34 out of 41 respondents. 
22  %  (equivalent  to  9  respondents)  opted  for  positive  or  slightly  positive,  29  %  (equivalent  to  12 
respondents)  opted  for  neutral  while  36  %  of  respondents  (equivalent  to  15  respondents,  mostly 
investors and NCAs) opted for negative or slightly negative. 

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Meetings  with  the  European  Securities  Committee  Expert  Group  The  Commission 
presented  the  possible  way  forwards  on  the  Listing  Act  as  part  of  the  CMU  project. 
Delegations participating in the discussion broadly supported the Commission’s objective of 
improving  the  attractiveness  of  EU  public  markets,  while  ensuring  investor  protection  and 
market integrity. More specifically, 13 Member States that took the floor showed openness to 
considering a minimum harmonisation of multiple-vote share provisions in EU law. 

Meeting with the ECON coordinators in the European Parliament 

The  MEP  Coordinators  that  participated  in  the  discussion  welcomed  the  Commission’s 
proposed  way  forward  on  the  Listing  Act,  acknowledging  the  problem  with  EU  public 
markets.  They  stressed  that  the  Commission  needs  to  find  a  right  balance  to  ensure  that  all 
companies, especially SMEs, can access public markets for funding, while at the same time 
ensuring adequate investor protection. 

Meeting with the Company Law Expert Group 

A Company Law Expert Group meeting took place to exchange views on the existing national 
multiple-vote share structures in some Member States. Several Member States took the floor 
to further substantiate their responses to the Commission survey (July-August 2022). 

• 

Collection and use of expertise 

The  Commission  collected  a  significant  amount  of  data  directly  from  securities  exchanges, 
issuers and SME associations. Moreover, the TESG (in force between October 2020 and May 
2021)  provided  some  evidence  as  well  as  the  input  from  the  market.  Furthermore,  the 
Commission  contracted  out  a  Study  on  Primary  and  Secondary  Equity  Markets  in  the  EU 
from Oxera in November 2020, which provided a very detailed overview of the market34, also 
supported by data. 

Previously, the Commission contracted out a study on the proportionality between ownership 
and control in EU-listed companies, which concluded with the Report on the Proportionality 
Principle  in  the  EU  (published  in  2007)35.  The  conclusions  of  that  report  were  recently 
confirmed in another study on minority shareholders protection, requested by the Commission 
and published in 2018. 

An impact assessment was conducted based on extensive qualitative and quantitative evidence 
from the public and targeted consultations on the Listing Act: making public capital markets 
more attractive for EU companies and facilitating access to capital for SMEs. 

Other  sources  used  included  extensive  academic  literature  and  research,  particularly  by 
examining jurisdictions that  already have multiple-vote shares in  place or that have recently 
adopted  legislation  allowing  them.  There  was  also  extensive  additional  input  from  various 
industry associations. 

34 

35 

The  Study  on  Primary  and  Secondary  Equity  Markets  in  the  EU  recommended  for  regulators  to  ease 
restrictions on control-enhancing mechanisms (such as multiple-vote shares) to encourage companies to 
list without owners having to relinquish control of their companies. 
The  study on the proportionality between ownership and control in Member States concluded that  no 
EU jurisdiction within the analysed sample opted for an all “one share one vote” principle. Even those 
Member States that had, to some extent, formally adopted the “one share one vote” principle authorised 
various  control-enhancing  mechanisms,  such  as  voting  right  ceilings  or  non-voting  preference  shares. 
These conclusions were then confirmed in a 2018 study on minority shareholders protection. This study 
contains a section on the application of the “one share, one vote” principle in Member States, where it is 
concluded  that  the  national  legal  frameworks  of  the  Member  States  do  not  see  this  principle  as  a 
fundamental one.  

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• 

Impact assessment 

This proposal is accompanied by an impact assessment that was submitted on 10 June 2022 to 
the Regulatory Scrutiny Board. It was approved by the Board – with reservations – on 8 July 
2022. 

The Board requested to amend the draft impact assessment to clarify: (i) the articulation and 
consistency of the Listing Act initiative with other linked capital markets initiatives; (ii) the 
risks and limitations of the analysis and acknowledge unintended consequences; and (iii) the 
different  views  expressed  by  different  categories  of  stakeholders  on  the  problem  definition, 
the  options  and  their  impact.  The  comments  formulated  by  the  Board  were  addressed  and 
integrated in the final version of the impact assessment. 

The impact assessment analyses several policy options to make listings on EU capital markets 
more attractive through streamlined, clear and more flexible regulatory obligations in order to 
reduce the costs associated with raising capital on public markets for companies of all sizes. 

The impact assessment describes three drivers that explain the problems relating to the three 
stages of the listing  cycle:  the pre-IPO stage, the  IPO process  itself  and the post-IPO stage. 
The  driver  that  was  identified  as  relevant  to  this  proposed  Directive  relates  to  unequal 
opportunities for EU companies regarding governance structure when listing, due to different 
national rules on multiple-vote shares. 

The  regulatory  amendments  set  out  in  the  options  could  not  single-handedly  address  all  the 
challenges  faced  by  the  EU  public  markets.  However,  together  with  other  measures 
considered as part of a wider plan to improve companies’ access to public capital markets, the 
amendments aim to help reverse the current negative trend in the EU public markets. Without 
these regulatory improvements, EU public markets would continue to rely on the suboptimal 
regulatory  framework  for  listing,  which  in  turn  would  reduce  the  attractiveness  of  public 
markets. This would result in an economic cost for EU issuers, investors and the EU economy 
as  a  whole.  The  baseline  scenario  therefore  includes  no  amendments  to  the  legislative 
framework governing the rules for companies seeking to list or already listed. 

The  preferred  policy  option  for  the  pre-IPO  stage  envisages  a  minimum  harmonisation  of 
national  laws  governing  multiple-vote  share  structures,  while  leaving  discretion  to  Member 
States on how to frame it. Under this option, Member States currently banning multiple-vote 
share structures would have to amend their laws to allow for such governance structures. The 
option would not impose any additional far-reaching constraints on those Member States that 
currently have a flexible and well-functioning regime in place. 

This  option  would  be  effective  in  providing  companies  (established  in  Member  States  that 
currently  ban  multiple-vote  share  structures)  with  an  incentive  to  list.  By  ensuring  that 
companies  can  be  admitted  to  trading  in  all  Member  States  with  multiple-vote  share 
structures,  the  preferred  option  would  allow  founders  and  company  owners  to  mitigate  the 
loss of control,  which is typically  associated with listing. This,  in  turn,  would open up new 
funding opportunities for those companies that would not otherwise consider listing. It would 
also generate substantial cost savings for those companies who currently need to list abroad to 
benefit from flexibility. Furthermore, multiple-vote shares would help founders (once listed) 
avoid short-term market pressures and focus on their long-term vision for the company. 

Under the preferred option, Member States would enjoy flexibility in setting safeguards and 
conditions around multiple-vote shares. However, they would need to ensure compliance with 
a  few  high-level  principles  and  minimum  safeguards  set  out  at  EU  level.  These  include  the 
need  to  ensure  an  adequate  balance  between  the  interests  of  founders  and  minority  investor 
protection, as well as the protection of the interests of the company. As Member States would 

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be  required  to  take  into  account  investors’  interests  and  the  interests  of  the  company  when 
introducing these share structures in their national systems, this option would ensure investor 
protection.  In  addition,  safeguards  and  conditions  would  be  tailored  to  the  particular 
characteristics  of  local  markets,  and  the  markets  that  already  have  multiple-vote  share 
structures in place would retain their flexibility. 

Another option (not the preferred option) provides for a maximum harmonisation of multiple-
vote  shares  by  introducing  a  detailed  set  of  rules,  including  on  safeguards  for  minority 
investors  and  for  the  company,  such  as  voting  power  limitation  clauses,  sunset  clauses, 
clauses setting out limitation on the number of votes attached to a single share, all of which 
would seek to protect minority investors and the company from undue impact of these share 
structures.  Furthermore,  under  this  option,  EU  law  could  also  prescribe  who  may hold 
multiple-vote  shares,  in  which  decisions  the  additional voting  rights  are  taken  into  account 
and on which conditions  (and whether) they  can  be transferred to  a third  party. This  option 
would  be  quite  prescriptive as  all  Member  States  would  be  obliged  to  implement  the  same 
rigid framework, including the same safeguards which would not allow flexibility to Member 
States that already have a well-functioning system in place. 

Therefore, the preferred  option, while being effective, would also  be more cost-efficient  for 
stakeholders, specifically issuers: Member States that already have regimes on multiple-vote 
shares in place would not have to  amend  their rules and companies in those Member States 
would not have to adapt to a new regime and incur additional costs. A much more prescriptive 
alternative option (not the preferred option) is likely to lead to much higher (adjustment) costs 
for both Member States and issuers across the EU. While overall investors’ interests and the 
interests  of  the  company  may  be  better  safeguarded  at  the  EU  level  under  the  alternative 
option,  it  may  be  unfit  for  some  Member  States,  where  investors  do  not  appear  to  be 
negatively affected under the current (flexible) multiple-vote share arrangements. 

The proposal  is  expected to  have a direct  economic impact  in  terms of increasing access  to 
alternative  sources  of  funding  for  EU  companies.  It  is  likely  to  lead  to  more  incentives  for 
issuers to list on public markets across Member States, where these structures are not allowed. 
Combined with other enhancing measures, it may hence lead to overall more public issuances 
in the EU, hence contributing in general to the growth of EU capital markets. 

As  regards  the  environmental  impacts,  including  do  no  significant  harm  and  climate 
consistency check, this proposal is expected to have an indirect positive environmental impact 
as  companies  receiving  funding  from  public  markets  may  engage  in  the  development  and 
innovation  of  new  environment-friendly  technologies.  Furthermore,  the  introduction  of  the 
specific  safeguards  should  minimise  an  impact  on  the  company  arising  from  decisions  that 
may result in adverse human rights, climate and environmental consequences. This proposal 
would  also  be  conducive  to  the  development  of  more  open  and  more  competitive  capital 
markets, benefiting in particular faster-growing companies in innovative and research-intense 
sectors  that  tend  to  have  higher  capital  needs.  A  better  access  to  finance  will  allow  these 
companies  to  grow  at  a  more  rapid  pace  and  allocate  more  financial  resources  to  R&D 
programmes that can contribute to the European Green Deal objectives. 

The proposal may lead to an indirect positive social impact, provided that the preferred option 
achieves the objective of contributing to easing companies’ access to public markets whereby 
they would now be able to benefit from a more diversified and larger pool of funding sources, 
allowing to engage in social innovation and employ more people. As the initiative targets in 
particular  SMEs  (with  some  measures  directly  addressed  at  them),  the  (indirect)  impact  on 
employment  is  likely  to  be  particularly  relevant.  Today,  SMEs  in  the  EU  provide  for 
employment  of  around  100  million  people,  account  for  more  than  half  of  the  EU  GDP  and 

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play a key role in adding value in every sector of the economy36. Importantly, they make up 
99.8 %  of  EU  companies37.  Provided  with  a  better-tailored  and  wider  access  to  financing, 
these  companies  will  now  be  able  to  grow  at  a  faster  pace,  with  positive  implications  for 
employment  across  the  EU.  As  such,  it  is  expected  that  the  measures,  as  part  of  a  wider 
package  to  facilitate  SMEs’  access  to  capital  market  finance,  will  positively  impact  the  EU 
labour market and increase economic cohesion. 

This  proposal  is  likely  to  have  an  indirect  positive  impact  on  digitalisation,  by  providing 
wider  and  more  diversified  sources  of  funding  for  capital-intense  projects  and  companies, 
including those focusing on digitalisation and innovation. 

The impact assessment concludes that the proposed ‘package’ of measures will contribute to 
the  overarching  CMU  goal  of  facilitating  access  to  capital  markets  for  companies.  This 
package of measures will support companies listed on EU trading venues, by reducing their 
administrative  burden  and  by  enabling  improved  liquidity.  However,  the  impact  assessment 
also  underlines  that  the  regulatory  measures  included  in  this  initiative  would  not,  on  their 
own,  necessarily  lead  to  an  increased  number  of  public  listings  in  the  EU,  the  latter  being 
dependent on many different factors. 

• 

Regulatory fitness and simplification 

No administrative cost impacts related to the ‘one in, one out’ approach have been identified, 
even though some adjustment costs are expected to arise from this initiative. Minimum direct 
adjustments  costs  for  companies  may  arise  so  as  to  ensure  that  a  listing  is  structured  in 
accordance with the new rules and more specifically, with the investor protection safeguards 
in place. 

• 

Fundamental rights 

This  proposal  respects  fundamental  rights  and  freedoms  laid  down  in  the  Charter  of  the 
Fundamental  Rights  of  the  European  Union.  The  free  movement  of  persons,  services  and 
establishment constituting one of the basic rights and freedoms protected by the Treaty on the 
European Union and the Treaty on the Functioning of the European Union is relevant for this 
initiative. 

The  proposal  affects  the  right  to  privacy  and  protection  of  personal  data  of  certain 
shareholders  and  persons  exercising  voting  rights  in  the  company,  as  well  as  holders  of 
securities  with  special  control  rights.  The  provision  requiring  disclosure  of  the  identity  of 
those  shareholders  and  persons  aims  at  strengthening  investor  confidence  and  facilitating 
informed investment decision-making, thereby enhancing both investor protection and market 
efficiency. Since the investor can be any member of general public, this information should be 
publicly available. The provision does not go beyond what is necessary to protect the interests 
of investors to make well-informed decisions and to guarantee investors’ trust. Furthermore, 
the  proposal  requires  disclosure  of  personal  data  only  in  relation  to  those  shareholders  and 
persons that have significant decision making power or may otherwise exercise control rights 
in the company. In the absence of such disclosure, investors would not be able to take fully-
informed investment decisions. 

36 

37 

Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions COM(2020) 103 final  - An SME 
Strategy for a sustainable and digital Europe, p. 1. 
Eurostat, 2018 Key Figures (europa.eu). 

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4. 

BUDGETARY IMPLICATIONS 

This initiative is not expected to have any noteworthy impact on the EU budget. 

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

An evaluation is envisaged 5 years after the implementation of the measure and according to 
the  Commission’s  better  regulation  Guidelines.  The  objective  of  the  evaluation  will  be  to 
assess, among other things, how effective and efficient the Directive has been in achieving the 
policy objectives and to  decide whether new measures or  amendments  are needed. Member 
States shall provide the Commission with the information necessary for the preparation of that 
evaluation. 

• 

Detailed explanation of the specific provisions of the proposal 

Article 1 sets out the subject matter. Article 1, in particular, sets out that this Directive only 
concerns  the  adoption  of  multiple-vote  share  structures  by  companies  seeking  listing  on  an 
SME growth market in one or more Member States for the first time. 

Article 2 sets  out  the definitions used in  this Directive, including  ‘company’, ‘multiple-vote 
share structures’, ‘multiple-vote shares’ and ‘SME growth market’. 

Article 3 clarifies that this Directive is a minimum harmonisation Directive and that Member 
States  may  adopt  or  retain  national  provisions  that  allow  companies  to  adopt  multiple-vote 
share structures in situations not covered by this Directive. 

Article 4 lays down the principle that Member States must ensure that companies may adopt 
multiple-vote share structures when they seek admission to trading of their shares on an SME 
growth market for the first time. Article 4 also ensures that Member States leave flexibility to 
companies to adopt multiple-vote share structures before seeking the admission of their shares 
to trading. In those cases, Member States have a possibility to set out that the enhanced voting 
rights associated to multiple vote shares, can only be used after the admission to trading has 
occurred. 

Article 5 sets out the obligation for Member States to ensure the fair and equal treatment of 
shareholders  and provide for the adequate protection of the interests of the company  and of 
the shareholders that do not hold multiple-vote shares by introducing appropriate safeguards. 
For  this  purpose,  Article  5  provides  for  a  minimum  level  of  harmonisation  in  relation  to 
safeguards  by  requiring  Member  States  to  include  certain  safeguards  listed  in  the  Article. 
Article 5 also lists additional safeguards that Member States may consider to that end. 

Article  6  sets  out  disclosure  requirements  for  companies  that  adopted  multiple-vote  share 
structures  that  apply  both  at  the  point  of  admission  to  trading  of  the  company’s  shares  and 
then recurrently on an annual basis. This includes information relating to the structure of the 
company’s share capital, the characteristics of the multiple-vote shares as well as the presence 
of other control-enhancing mechanisms in the company. 

Article 7 contains a provision on the review of this Directive. 

Article 8 contains provisions on the transposition of the Directive. 

Article 9 includes the date as of when this Directive enters into force. 

Article 10 sets out the addressees of this Directive. 

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2022/0406 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on multiple-vote share structures in companies that seek the admission to trading of 
their shares on an SME growth market 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 50(1) and Article 50(2), point (g) and Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 
Having regard to the opinion of the European Economic and Social Committee38, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

To reinforce the attractiveness of SME growth markets and to reduce inequalities for 
companies seeking admission to trading in the single market, it is necessary to address 
obstacles to the access to such markets that stem from regulatory barriers. Companies 
should be able to choose governance structures that suit best their development stage, 
including by enabling controlling shareholders of those companies to retain control of 
the  business  after  accessing  SME  growth  markets,  while  enjoying  the  benefits 
associated to trading on those markets, as long as the rights of minority shareholders 
continue to be safeguarded. 

Fear  of  losing  control  over  a  company  constitutes  one  of  the  main  deterrents  for 
controlling shareholders to access SME growth markets. Admission to trading usually 
entails dilution of ownership for controlling shareholders, thus reducing their influence 
over  important  investment  and  operating  decisions  in  the  company.  Maintaining 
control  of  the  company  may  in  particular  be  important  for  start-ups  and  companies 
with long-term projects that require significant upfront costs, because they may wish 
to pursue their vision without becoming too exposed to market fluctuations. 

(3)  Multiple-vote  share  structures  are  an  effective  mechanism  to  enable  controlling 
shareholders to retain decision-making power in a company, while raising funds from 
the  public. Multiple-vote  share  structures  are  a  form  of  a  control  enhancement 
mechanism involving at least two distinct classes of shares with a different number of 
voting rights. Under such structures, at least one of the classes of shares has a lower 
voting  value  than  another  class  (or  classes)  of  shares  with  voting  rights.  The  share 
carrying the superior amount of votes is a multiple-vote share. 

38 

OJ C [...], [...], p. [...] 

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(4) 

(5) 

(6) 

There  are  other  control  enhancing  mechanisms  that  allow  leveraging  voting  power, 
apart  from  multiple-vote  share  structures.  Such  mechanisms  may  include  non-voting 
shares,  non-voting  preference  shares  and  voting  right  ceilings.  However,  those 
alternative control enhancing mechanisms, being more rigid in their set-up, are liable 
to constrain the amount of capital that a company can raise at the point of admission to 
trading  on  SME  growth  markets  due  to  the  lower  disassociation  between  economic 
and voting rights. 

Loyalty  shares,  like  multiple-vote  shares,  confer  superior  voting  rights  to  a 
shareholder.  A  shareholder  may  obtain  additional  voting  rights  attached  to  loyalty 
shares,  holding  the  share  for  the  designated  time  and  complying  with  certain 
conditions.  Loyalty  shares  are  control-enhancing  mechanisms  that  are  designed  to 
foster a more stable, long-term oriented ownership among shareholders rather than to 
increase  the  attractiveness  of  raising  funds  from  the  public.  It  is  therefore  not 
appropriate to include loyalty shares in the scope of this Directive. 

There are substantial differences between national provisions on multiple-vote shares 
across  Member  States.  Some  Member  States  allow  multiple-vote  share  structures, 
while  others  ban  them.  In  some  Member  States,  the  ban  on  multiple-vote  shares  is 
limited  to  public  companies,  while  in  others  it  applies  to  all  companies.  The 
differences in national regimes create barriers to the free movement of capital within 
the internal market. Moreover, the regulatory fragmentation creates an uneven playing 
field  for  companies  in  different  Member  States.  Companies  in  a  Member  State  that 
bans  multiple-vote  share  structures  have  to  move  to  another  Member  State  or  even 
outside  the  Union  if  they  seek  admission  to  trading  with  multiple-vote  shares,  and 
hence face higher costs. In some cases, because of those higher costs, companies may 
decide  against  raising  funds  from  the  public,  which  may  limit  their  funding 
opportunities.  Such  considerations  are  particularly  relevant  for  SMEs  and  start-ups 
that lack financial resources to cover those costs. 

(7)  Member States should provide companies with  the possibility to  adopt  multiple-vote 
share structures to allow them to seek admission to trading on a SME growth market 
without their controlling shareholders having to relinquish control. While admission to 
trading on regulated markets is more suitable for larger and more mature companies, 
SME growth markets are generally more appropriate for SMEs. SME growth markets 
were originally designed as SME dedicated trading venues with a regulatory treatment 
that takes the particularities of SMEs into account. Not all companies with securities 
listed  on  SME  growth  markets  are,  however,  SMEs.  Directive  2014/65/EU  of  the 
European Parliament and of the Council39 requires that SMEs constitute at least 50 % 
of  the  issuers  of  financial  instruments  admitted  to  trading  on  SME  growth  markets. 
Companies  other  than  SMEs  generally  have  more  liquid  securities  and  hence  their 
admission  to  SME  growth  markets  enables  those  markets  to  generate  higher  trading 
fees  to  maintain  profitability  of  their  business  model.  Nevertheless,  to  ensure  clarity 
for  investors,  all  issuers  on  SME  growth  markets,  irrespective  of  their  size,  are 
currently subject to the same rules. It is therefore appropriate that the introduction of 
the  right  to  adopt  multiple-vote  share  structures  applies  to  all  companies  seeking 
admission of their shares on an SME growth market for the first time. 

39 

Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 on  markets  in 
financial  instruments  and  amending  Directive  2002/92/EC  and  Directive  2011/61/EU  (OJ  L  173, 
12.6.2014, p. 349). 

EN 

17 

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(8)  Member States should be able to  introduce, or  maintain in  force, national  provisions 
that  allow  companies  to  adopt  these  structures  for  purposes  other  than  the  first  time 
admission  to  trading  of  shares  on  a  SME  growth  market.  That  includes  allowing 
companies  to  adopt  multiple-vote  shares  when  already  admitted  to  trading,  when 
seeking  admission  on  a  Multilateral  Trading  Facility  that  is  not  registered  as  SME 
growth market or on a regulated market, or ensuring that private companies can adopt 
multiple-vote shares, regardless of whether they intend to request admission to trading 
of their shares. This may also include cases whereby companies transfer from an SME 
growth market to a regulated market, while retaining multiple-vote shares. 

(9) 

Companies may adopt multiple-vote share structures through a new issuance of shares 
or  through  another  type  of  corporate  transaction,  such  as  the  conversion  of  already 
issued  shares.  Companies  should  have  the  flexibility  to  choose  the  most  appropriate 
type  of  corporate  transaction  to  adopt  multiple  vote  share  structures  in  compliance 
with  national  law.  Furthermore,  companies  should  also  have  the  flexibility  as  to  the 
timing of the adoption of multiple-vote share structures, provided they do so to seek a 
first  time  admission  of  shares  to  trading  on  a  SME  growth  market.  Member  States 
should not prevent companies from adopting multiple-vote share structures at a point 
prior  to  the  moment  of  the  admission  of  shares  to  trading.  Member  States  should, 
however,  be  allowed  to  lay  down  that  the  exercise  of  the  enhanced  voting  rights, 
which represent additional voting rights attached to multiple-vote shares compared to 
voting rights of shares of other classes, is conditional upon the admission to trading of 
shares on an SME growth market in one or more Member States. In that case and until 
the  admission  to  trading,  multiple-vote  shares  should  have  the  same  voting  rights  as 
other  classes  of  shares  in  the  company.  That  would  ensure  that  multiple  vote  shares 
specifically promote a first-time admission to trading on SME growth markets. 

(10)  Due  to  a  diminished  voting  power  of  non-controlling  shareholders  in  the  company 
relative  to  their  investments,  multiple-vote  share  structures  may  provide  controlling 
shareholders  of  that  company  with  perpetual  control  and  thereby  lead  to  controlling 
shareholder  entrenchment.  That  may  increase  the  risk  that  controlling  shareholders 
extract private benefits from control. To address those risks, the adoption of multiple-
vote share structures should be subject to safeguards to protect minority shareholders. 

(11)  Member  States  that  allow  multiple-vote  shares  provide  for  safeguards  to  protect 
minority  shareholders  and  the  interests  of  the  company.  However,  the  existing 
safeguards  vary  between  Member  States  due  to  national  specificities  and  diverging 
company law systems. Having regard to the objectives of the internal market as set out 
in  particular  in  Article  50(2),  point  (g)  of  the  Treaty  on  the  functioning  of  the 
European  Union,  Member  States  should  ensure  a  coordinated  approach  in  their 
national  laws  on  multiple-vote  share  structures  with  respect  to  the  protection  of  the 
interests of minority shareholders and of the company. This includes protection against 
decisions creating risks for or resulting in adverse human rights, climate change, and 
environmental  consequences.  Under  that  coordinated  approach,  all  Member  States 
should ensure that any decision to adopt a multiple-vote share structure, or to modify 
that structure where there is an impact on voting rights, is taken by a qualified majority 
at  the  general  shareholders’  meeting.  Furthermore,  Member  States  should  limit  the 
voting weight of multiple-vote shares by introducing restrictions either on the design 
of  the  multiple-vote  share  structure  or  on  the  exercise  of  voting  rights  attached  to 
multiple-vote  shares  for  the  adoption  of  certain  decisions.  The  restriction  on  the 
exercise  of  voting  rights  may  be  implemented  by  requiring  that  an  approval  by 
qualified majority necessitates both a qualified majority of the votes cast at the general 

EN 

18 

  EN 

meeting of shareholders and of the share capital represented at the general meeting of 
shareholders. 

(12)  Member  States  should  be  given  discretion  to  introduce  additional  safeguards,  where 
needed,  to  ensure  adequate  protection  of  minority  shareholders’  interests  and  the 
interest  of  the  company.  Member  States  should  assess  the  appropriateness  of 
additional  safeguards  in  light  of  their  effectiveness  in  protecting  the  interests  of 
minority shareholders and of the company, while ensuring that such safeguards do not 
defeat  the  purpose  of  multiple-vote  share  structures,  i.e.  the  possibility  for  a 
company’s  controlling  shareholders  to  influence  important  decisions,  including  the 
appointment of directors. 

(13)  The  disclosure  of  accurate,  comprehensive  and  timely  information  about  issuers 
strengthens investor confidence and allows for informed investment decision-making. 
Such  informed  investment  decision-making  enhances  both  investor  protection  and 
market  efficiency.  Member  States  should  therefore  require  companies  with  multiple-
vote  share  structures  to  publish  detailed  information  on  their  share  structure  and 
corporate  governance  system  at  the  moment  of  the  admission  to  trading,  as  well  as 
periodically in the annual financial report. Such information should mention whether 
there are any limitations on the holding of securities, including whether any transfer of 
securities requires the approval either of the company, or of other holders of securities. 
It  should  also  mention  whether  there  are  any  restrictions  on  voting  rights,  including 
limitations  of the  voting  rights  of  holders  of  a  given  percentage  or  number  of  votes, 
deadlines for exercising voting rights, or systems whereby the financial rights attached 
to  securities  are  separated  from  the  holding  of  securities.  Furthermore,  those 
companies should disclose the identity of holders of multiple-vote shares as well as of 
the  natural  persons  entitled  to  exercise  voting  rights  on  their  behalf  and  of  persons 
exercising  special  control  rights  to  provide  investors,  as  members  of  general  public, 
with transparency on ultimate ownership and de facto influence on the company. This 
would  allow  investors  to  make  informed  decisions  and  thereby  strengthen  their 
confidence in well-functioning capital markets. 

(14)  Since  the  objectives  of  this  Directive,  namely  to  increase  funding  options  for 
businesses and make SME growth markets more attractive, cannot be sufficiently and 
timely achieved by Member States but can rather, by reason of the scale and effects of 
the  measures,  be  more  effectively  and  expeditiously  achieved  at  Union  level,  the 
Union may adopt measures, in accordance with the principle of subsidiarity as set out 
in Article 5 of the Treaty on the European Union. In accordance with the principle of 
proportionality,  as  set  out  in  that  Article,  this  Directive  does  not  go  beyond  what  is 
necessary in order to achieve those objectives. 

(15)  To  take  account  of  market  developments  and  developments  in  other  areas  of  Union 
law  or  Member  States’  experiences  with  the  implementation  of  this  Directive,  the 
Commission should review this Directive 5 years following the date of transposition. 

(16) 

In accordance with  the Joint Political  Declaration of 28 September 2011 of Member 
States  and  the  Commission  on  explanatory  documents40,  Member  States  have 
undertaken  to  accompany,  in  justified  cases,  the  notification  of  their  transposition 
measures  with  one  or  more  documents  explaining  the  relationship  between  the 
components  of  a  directive  and  the  corresponding  parts  of  national  transposition 
instruments. With regard to this Directive, the legislator considers the transmission of 
such documents to be justified. 

40 

OJ C 369, 17.12.2011, p. 14. 

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(17)  The  European  Data  Protection  Supervisor  was  consulted  in  accordance  with  Article 
42(1)  of  Regulation  (EU)  2018/1725  of  the  European  Parliament  and  of  the 
Council41 and delivered an opinion on [XX XX 2022/2023]42 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Subject Matter 

This Directive lays down common rules on multiple-vote share structures in companies that 
seek  the  admission  to  trading  of  their  shares  on  an  SME  growth  market  in  one  or  more 
Member States and that do not have shares already admitted to trading on any trading venue. 

For the purposes of this Directive, the following definitions shall apply: 

Article 2 

Definitions 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

‘company’ means a legal entity incorporated as one of the types of companies 
listed in Annex I to Directive (EU) 2017/1132; 

‘multiple-vote shares’ means shares belonging to  a distinct and separate class 
and  that  carry  higher  voting  rights  than  another  class  of  shares  with  voting 
rights on matters to be decided at the general meeting of shareholders; 

‘multiple-vote  share  structure’  means  the  share  structure  of  a  company  that 
contains at least one class of multiple-vote shares; 

‘trading venue’ means a trading venue as defined in Article 4(1), point 24, of 
Directive 2014/65/EU; 

‘SME growth market’ means an SME growth market as defined in Article 4(1), 
point (12) of Directive 2014/65/EU; 

‘weighted  voting  ratio’  means  the  ratio  of  votes  attached  to  multiple-vote 
shares to votes attached to shares with the least voting rights. 

Article 3 

Introduction or maintenance of national provisions on multiple-vote shares 

Member States may introduce or maintain in force national provisions that allow companies 
to adopt multiple-vote share structures in situations not covered by this Directive. 

Article 4 

Adoption of multiple-vote share structures 

1. 

41 

42 

Member States shall ensure that companies that do not have shares that are admitted 
to  trading  on  a trading  venue have the right  to adopt  multiple-vote share structures 

Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the 
protection of natural persons with regard to the  processing of personal data by the Union institutions, 
bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 
45/2001  and  Decision  No  1247/2002/EC  (Text  with  EEA  relevance.),  (OJ  L  295,  21.11.2018,  p.  39–
98). 
[OP: Footnote once available]. 

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2. 

3. 

1. 

for  the  admission  to  trading  of  shares  on  an  SME  growth  market  in  one  or  more 
Member States. Member States shall not prevent the admission to trading of shares 
of a company on an SME growth market on the ground that the company has adopted 
a multiple-vote share structure. 

The  right  referred  to  in  paragraph  1  encompasses  the  right  to  adopt  multiple-vote 
share  structures  in  time  prior  to  seeking  the  admission  to  trading  of  shares  on  an 
SME growth market. 

Member States may make the exercise of the enhanced voting rights attached to the 
multiple-vote shares conditional upon the admission to trading of shares on an SME 
growth market in one or more Member States. 

Safeguards for fair and non-discriminatory treatment of shareholders of a company 

Article 5 

Member States shall ensure fair and non-discriminatory treatment of shareholders, as 
well  as  adequate  protection  of  the  interests  of  the  shareholders  who  do  not  hold 
multiple-vote  shares  and  of  the  company  through  appropriate  safeguards.  To  that 
effect, Member States shall do all of the following: 

(a) 

ensure that a company’s decision to adopt a multiple-vote share structure and 
any subsequent decision to modify a multiple-vote share structure that affects 
voting  rights  are  taken  by  the  general  shareholders’  meeting  of  that  company 
and are approved by a qualified majority as specified in national law. 

         For the purposes  of this  point, where there are several  classes of shares, such 
decisions shall also be subject to a separate vote for each class of shareholders 
whose rights are affected; 

(b) 

limit  the  voting  weight  of  multiple-vote  shares  on  the  exercise  of  other 
shareholders’  rights,  in  particular  during  general  meetings,  by  introducing 
either of the following: 

(i) 

(ii) 

a  maximum  weighted  voting  ratio  and  a  requirement  on  the  maximum 
percentage  of  the  outstanding  share  capital  that  the  total  amount  of 
multiple-vote shares can represent; 

a  restriction  on  the  exercise  of  the  enhanced  voting  rights  attached  to 
multiple-vote  shares  for  voting  on  matters  to  be  decided  at  the  general 
meeting  of  shareholders  and  that  require  the  approval  by  a  qualified 
majority. 

2. 

Member States may provide for further safeguards to ensure adequate protection of 
shareholders and of the  interests of the company. Those safeguards may  include in 
particular: 

(a) 

(b) 

a provision  to  avoid  that the enhanced voting  rights  attached to  multiple-vote 
shares  are  transferred  to  third  parties  or  continue  to  exist  upon  the  death, 
incapacitation  or  retirement  of  the  original  holder  of  multiple-vote  shares 
(transfer-based sunset clause); 

a provision  to  avoid  that the enhanced voting  rights  attached to  multiple-vote 
shares  continue  to  exist  after  a  designated  period  of  time  (time-based  sunset 
clause); 

EN 

21 

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(c) 

(d) 

a provision  to  avoid  that the enhanced voting  rights  attached to  multiple-vote 
shares continue to exist upon the occurrence of a specified event (event-based 
sunset clause); 

a requirement to ensure that the enhanced voting rights cannot be used to block 
the  adoption  of  decisions  by  the  general  shareholders’  meeting  aiming  at 
preventing,  reducing  or  eliminating  adverse  impacts  on  human  rights  and  the 
environment related to the company’s operations. 

Article 6 

Transparency 

Member  States  shall  ensure  that  companies  with  multiple-vote  share  structures 
whose shares are traded or are to be traded on an SME growth market make publicly 
available,  in  the  [EU  Growth  issuance  document  referred  to  in  Article  15a] of 
Regulation  (EU)  2017/1129  of  the  European  Parliament  and  of  the  Council43 or  in 
the  admission  document  referred  to  in  Article  33(3),  point  (c),  of  Directive  (EU) 
2014/65/EU and in the company’s annual financial report referred to in Article 78(2), 
point  (g),  of  Commission  Delegated  Regulation  (EU)  2017/56544,  detailed 
information on all of the following: 

(a) 

(b) 

(c) 

(d) 

(e) 

the  structure  of  their  capital,  including  securities  which  are  not  admitted  to 
trading on an SME growth market in a Member State, with an indication of the 
different  classes  of  shares  and,  for  each  class  of  shares,  the  rights  and 
obligations attached to that class and the percentage of total share capital and 
total voting rights that such class represents; 

any restrictions on the transfer of securities, including any agreements between 
shareholders which are known to the company that could result in restrictions 
on the transfer of securities; 

the  identity  of  holders  of  any  securities  with  special  control  rights  and  a 
description of those rights; 

any  restrictions  on  voting  rights, 
including  any  agreements  between 
shareholders which are known to the company that could result in restrictions 
on voting rights; 

the identity of the shareholders holding multiple-vote shares and of the natural 
person  or  legal  entity  entitled  to  exercise  voting  rights  on  behalf  of  such 
shareholders, where applicable. 

Where the holders of multiple-vote shares or the persons entitled to exercise voting 
rights  on  their  behalf  or  the  holders  of  securities  with  special  control  rights  are 
natural  persons,  the  disclosure  of  their  identity  shall  require  only  the  disclosure  of 
their names. 

Regulation  (EU)  2017/1129  of  the  European  Parliament  and  of  the  Council  of  14  June  2017  on  the 
prospectus  to  be  published  when  securities  are  offered  to  the  public  or  admitted  to  trading  on  a 
regulated market, and repealing Directive 2003/71/EC (OJ L 168, 30.6.2017, p. 12) 
Commission  Delegated  Regulation  (EU)  2017/565  of  25  April  2016  supplementing  Directive 
2014/65/EU of the European Parliament and of the Council as regards organisational requirements and 
operating conditions for investment firms and defined terms for the purposes of that Directive (OJ L 87, 
31.3.2017, p. 1). 

1. 

2. 

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Article 7 

Review 

By  [five  years  after  the  entry  into  force],  the  Commission  shall  submit  a  report  to  the 
European Parliament and the Council on the implementation and effects of this Directive. To 
that  effect  by  [four  years  after  the  entry  into  force],  Member  States  shall  provide  the 
Commission with information in particular on the following: 

(a) 

(b) 

(c) 

the number of companies admitted to trading with multiple-vote shares; 

the  sector  in  which  the  companies  referred  to  in  point  (a)  are  active  and  the 
respective capitalisation at the moment of issuance; 

the investor protection safeguard applied by the companies referred to in point 
(a) with respect to multiple-vote share structures; 

Article 8 

Transposition 

1. 

Member  States  shall  bring  into  force  the  law,  regulations  and  administrative 
provisions necessary to comply with this Directive by 2 years after the date of entry 
into force of this Directive. They shall immediately inform the Commission thereof. 
When  Member  States  adopt  those  measures,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. The methods of  making such reference shall be laid down by  Member 
States. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

Article 9 

Entry into force 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 10 

Addressees 

This Directive is addressed to the Member States. 

Done at Brussels, 

For the European Parliament 
The President 
[...] 

For the Council 
The President 
[...] 

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