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Stock Corporation Amendment Act

The Austrian Stock Corporation Amendment Act 2009 (AktRÄG), which entered into force on August 1 2009 introduces new rules that are aimed at facilitating (foreign) shareholders' participation and voting in shareholder meetings and thus at increasing free float shareholders' participation. The AktRÄG applies to shareholder meetings convened after July 31 2009.

It remains to be seen whether these legislative efforts will be accepted and the technologies implemented by Austrian listed corporations, allowing alternative means of shareholder participation and voting.

Shareholder eligibility

The biggest change is the abolishment of the share blocking system. From now on, a shareholder's eligibility to participate in a shareholders meeting is determined by its shareholding by the end of the 10th day (latest 24 hours) prior to the date of the relevant shareholders meeting (the record date). The record date may be a Sunday or a public holiday. Shares can be traded after the record date.

Non-listed corporations may either stick to the old share blocking or opt for the record date system.

Instead of submission of a confirmation of deposit (Hinterlegungsbescheinigung) under the (old) share blocking system, the AktRÄG introduces evidence of record date shareholding by the submission of a depositary excerpt to the corporation.

Unless the shareholders invitation notice to a shareholders meeting (Einladung zur Hauptversammlung) provides for an earlier or later date for submission, a holder of bearer shares (Inhaberaktien) must submit the depositary excerpt to the relevant corporation by the third business day (last 24 hours) prior to the date of the shareholders meeting.

Details for electronic submission will be given by the corporation in the invitation notice of a shareholders meeting; however, listed companies are obliged to offer the possibility to receive depositary excerpts via the Swift network.

The depositary excerpt (Depotbestätigung) may be issued by a foreign depositary credit institution provided that the credit institution has its corporate seat in the European Economic Area or a full member state of the OECD. The depositary excerpt can be in German or English.

If bearer shares are not deposited with a securities account and the articles of association of the corporation are silent on form requirements, a shareholder is free to submit to the corporation a (written) confirmation issued by an Austrian public notary showing record date shareholding.

Admission to voting requires that a holder of a registered share (Namensaktien) must be registered in the company's share ledger (Aktienbuch) on the record date. Unless the invitation notice of a shareholders meeting requests otherwise, no formalities have to be complied with, other than proof of identity by a holder of a registered share when entering the shareholders meeting. As to shares embodied in physical interim share certificates (Zwischenscheine), the foregoing applies mutatis mutandis.

Participation and voting

Under the AktRÄG, listed or non-listed corporations may include in their articles of association an authorisation for the management to determine in the invitation notice any or all of the following forms of alternative shareholder participation and shareholder voting:

  • participation by attending a parallel meeting which is transmitted in real time (Satellitenversammlungen);
  • participation by real-time two-way communication, enabling shareholders to address the general meeting (Fernteilnahme), and
  • casting votes either by electronic means or by mail, whether before or during the shareholders meeting (Fernabstimmung; Briefwahl).

Proxy

If a shareholder is unable to attend an annual or special meeting in person or via electronic means it may vote by proxy.

Under the new regime, a proxy must be issued in writing and contain information to safeguard identification of the proxy holder and the shareholder. A handwritten signature by the shareholder is no longer required; the name of the shareholder granting the proxy or a scanned copy of its signature is sufficient. Non-listed corporations may stick to written proxies.

Gudrun Stangl and Eva Maria Baumgartner

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