Marilia Paraschou

Marilia Paraschou

Shareholders Rights Directive III: Now Coming into effect in Cyprus

The Law on the Encouragement of Long-Term Shareholder Engagement of 2021 (Law 111 (I)/2021) (the “Law”), which has come into effect on May 12th 2021, transposes Directive (EU) 2017/828 (the “Directive”) into Cyprus law. The Directive revises its predecessor, Directive (EU) 2007/36, and regulates the exercise of certain shareholder’s rights for listed companies, while it also promotes the active engagement of such companies’ shareholders in the decision-making process.

The Directive

The Directive introduces measures to promote the active engagement of shareholders at the Annual General Meetings of Companies, which have their corporate seat in the European Union (EU) and are listed in organised or regulated markets in the EU. The Directive aims to encourage the long-term active engagement of the shareholders, to ensure that decision-making for the company encapsulates the long-term stability of the company, while further, that social and environmental issues are also taken into consideration.

The amended legislation provides for the easier identification of company shareholders, the easier communication between the company and the shareholders, improves the regulation on the remuneration of company officers and establishes greater transparency. The Directive creates further rights for shareholders, some of which include the right to determine the remuneration of company officers, the facilitation of exercising shareholder rights and transparency for institutional investors, asset administrators and proxy holder counsellors.


The Law will affect intermediaries providing custodian services, asset management services and safekeeping of shares on behalf of beneficial shareholders, Proxy advisors, Asset Managers, Institutional Investors and companies with a registered office in Cyprus issuing shares which are traded on a regulated market within the EU.

Next Steps

We are awaiting further announcements from the Cyprus Securities and Exchange Commission (CySEC) on how this will be implemented and treated from the regulators’ perspective. Listed companies and entities affected should take note of the provisions of this new legislation.

Should you wish to find out more contact our team.

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