On March 26, the Spanish Securities and Exchange Commission and the Association of Registrars issued a joint statement on the measures listed companies must implement regarding general meetings while restrictions and recommendations arising from the COVID-19 health crisis are in effect.
On April 28, the Spanish Securities and Exchange Commission and the
Association of Registrars jointly issued a supplementary statement to that of March 26 on measures to be taken in
listed companies’ general meetings while the
recommendations and restrictions arising from the COVID-19 health crisis on people’s movement and gatherings of a significant number of people are
in effect.
Royal Decree Law 8/2020 extended the period for holding
listed companies’ annual meetings until the ten months following the company’s
year-end closing (in most cases, October 31, 2020). This new statement presents
a series of recommendations should it remain necessary, in the framework of the
foreseen de-escalation, to adopt measures allowing general meetings to go
ahead, while safeguarding people’s health and avoiding the
spread of the virus.
Beyond the provisions of Royal Decree Law 8/2020, listed
companies’ boards of directors should be given the flexibility necessary to adopt measures to that end,
even if they are not expressly envisaged in the companies’ internal
regulations, provided they are within the applicable legal
framework and
effectively ensure that shareholders can exercise their
rights to information,
attendance and voting rights and equal treatment of shareholders in the same
position.
Accordingly, boards are advised to
include two possible scenarios in the call notice: on the one hand, the meeting
could be held in a framework in which the public authorities’ restrictions and
recommendations regarding the health crisis remain effective and, on the other
hand, the possibility that those measures will have ended by the time the
meeting is held. The call notice should set out the meeting system in each
case. When using this option, the call notice should also envisage publication
of a supplementary announcement specifying the meeting system at least five
calendar days before the scheduled date.
In relation to equal treatment of shareholders in the same position, the statement points out that the possible restrictions and recommendations on movement and gatherings of a certain number of people could limit the right of all or some of the shareholders to attend the general meeting in person or represented, so the board could decide to hold the meeting exclusively online to avoid discriminatory situations. If so, all shareholders must be offered the option to participate in the meeting by one of the methods envisaged in section 41.1.d) of Royal Decree Law 8/2020: (i) online attendance, (ii) representation granted to the meeting Chairperson by remote communication, or (iii) advance remote voting.