The European Commission has launched a public consultation to glean investor and industry insights on a potential update of the Shareholder Rights Directive (SRD).

The call for evidence is seeking views from companies, investors, shareholders and other stakeholders on obstacles are limiting cross-border investment stemming from the exercise of shareholder rights, as well as how altering the rules could help alignment and unity across EU capital markets. Respondents have also been invited to share their views on “how shareholder rights could be modernised to effectively address changes in market practices and technological developments” and the “challenges and shortcomings of the current SRD. The consultation and call for evidence are open until 6 May 2026, with the responses feeding into the potential review of the directive.

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Key Client Takeaways:

Commission Launches SRD Review

• The European Commission has opened a public consultation and call for evidence to assess whether the Shareholder Rights Directive remains fit for purpose today and to gather feedback on potential updates.

Inviting Investor, Shareholder Input

• The consultation specifically looks to gather views from investors, shareholders, companies and other stakeholders to understand obstacles to exercising shareholder rights and assess how updating the SRD could better meet market needs and expectations.

Reducing Fragmentation, Cross-border Efficiency Push

• The Commission aims to reduce fragmentation across the Single Market, as well as enhancing cross-border efficiency, making it easier and cheaper for investors, intermediaries and issuers to operate across Member States.

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The SRD was passed in 2007 with EU member states given until 2009 to ensure that the directive was being implemented. It established Europe-wide principles for ensuring certain basic rights of shareholders at European listed companies, as reported by Minerva Analytics. The directive was revised in 2017 – known as SRD II – to augment incorporation of engagement policies and investment policies from investors and proxy advisors and was required to be implemented into law by member states in 2019. However, given the notable shifts in shareholder rights both within the EU and beyond in the near decade since SRD II many have suggested that further revisions are needed to ensure that the regulation remains fit for purpose today. As part of the Commission’s 2026 work programme published in October an evaluation of the SRD was scheduled, as well as mentioning a “strengthening of shareholder rights”.

The consultation and call for evidence will evaluate areas including whether the SRD has achieved the objectives intended when it was enacted, the costs and benefits of the current rules for specific stakeholders and whether any simplification is needed and whether the SRD has responded to the needs and expectations of stakeholders. It also looks to gauge feedback on the internal coherence of the shareholder rights framework and its external coherence with other EU/international instruments, as well as to what extent the SRD’s achievements could not have been realised by Member States acting at national level.

“Shareholders are the engines of growth, providing the capital, confidence, and long-term support companies need to expand and drive cross-border investment across the EU,” said Michael McGrath, EU Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection.” This is why a clear and effective system for shareholder rights is essential; we want to hear directly from investors, innovators, and all stakeholders – what still holds our markets back, how can we break down barriers, and how can we build a simpler, fitter and more efficient system to boost the competitiveness of the EU.”

The Commission has outlined its commitment to reduce fragmentation and eliminate obstacles interfering with cross-border investment within the Single Market to improve competitiveness and stimulate private investment, particularly for “innovative and future-oriented growth sectors”. These efforts aim to establish a more “integrated, liquid and efficient” capital market across the EU.

The Commission stated that the SRD can help achieve this aim by making it easier and cheaper for investors, intermediaries and issuers to operate across Member States. It added that enabling shareholders to “easily and efficiently” exercise their rights, especially across borders, and ensuring a smooth interaction between listed companies and their shareholders is a key aspect of achieving this objective. The Commission claimed that the efficiencies this could create may well help direct private investment into sectors with substantial investment needs, driving essential economic growth and bolstering the bloc’s competitiveness.

“The initiative is expected to have positive economic effects,” the Commission stated. “It is expected to reduce burdens on stakeholders, reduce compliance costs and bring about efficiency gains.” It added that evaluation and review of the SRD would “help mobilise private investment in EU listed companies, increase cross-border investment, create a deeper and more liquid EU capital market, increase competitiveness and promote EU economic growth” and “would boost investors’ confidence in the EU capital market and make the EU a more attractive investment destination, for both EU and non-EU share investors”.

Some have already publicly weighed in on the future direction of the SRD. This included the International Corporate Governance Network which suggested that a revision to the SRD II should focus on removing the remaining barriers to a modern and efficient voting process, as reported by Minerva Analytics. The suggestion was made by the network to help harmonise shareholder rights and create more cohesive legislation. The group also called on the Commission to align annual general meeting practices and shareholder proposal standards, as well as stressing support for the “one share, one vote” standard to avoid damaging disparities in voting rights.

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