Skip to content

Subscribe to Asset Servicing & Fintech Insights

Discover more information in our monthly publication, the AXIS newsletter, including industry trends, product innovation, Fintech and more from our team of experts.

Shareholder Rights Directive II - Key Impacts and How Northern Trust can Assist You

Read our summary of impacts arising from the European Union's Shareholder Rights Directive II, which is focused on improving the position of shareholders and supporting decision-making to increase the long-term stability of companies.

Directive (EU) 2017/828 (the Shareholder Rights Directive (SRD) II), amends the original SRD that came into effect in 2007. As an EU Directive, its scope is intended to improve corporate governance standards for Issuers registered within the European Economic Area (EEA). As a result, its application extends to securities traded on EEA-regulated markets.

SRD II extends to companies which have their registered office in a Member State and whose shares are traded on a regulated market situated or operated within a Member State. However, the custody chain for these companies may extend beyond the EU and EEA countries and hence SRD II may have an extra territorial impact on intermediaries and shareholders located outside the EU/EEA.

At its heart, the Directive is focused on improving the position of shareholders and supporting decision making aiming to increase the long-term stability of companies.

The genesis of the Directive was brought about for several reasons. Firstly, it was felt that post the financial crisis, there was a need for the strengthening of corporate governance to protect against excessive risk taking and to promote long termism. It was also acknowledged there was a need to increase monitoring  of engagement between shareholders and issuer companies.

Allowing for closer relationships between market participants would remove concerns  around sub optimal governance and performance. And finally, it has also long been recognized that the pre-existing complex chain of intermediaries used to vote shares  was acting as a barrier to effective communications between parties.

To counter these concerns and to achieve the effective exercising of shareholder rights, SRD II sets clear objectives for intermediaries requiring transmissions of information between shareholders and companies.

In order to achieve the stated objectives of the Directive, the amending articles contained within SRD II are broad in scope. These obligations impact EU companies, intermediaries, institutional investors, asset managers and proxy advisors.

For more information, download our summary.


Read our frequently asked questions (FAQs) on the European Union’s Shareholder Rights Directive II – the key requirements of which come in to force September 2020.

© 2021 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability in the U.S. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. This material is directed to professional clients only and is not intended for retail clients. For Asia-Pacific markets, it is directed to expert, institutional, professional and wholesale clients or investors only and should not be relied upon by retail clients or investors.For legal and regulatory information about our offices and legal entities, visit The following information is provided to comply with local disclosure requirements: The Northern Trust Company, London Branch; Northern Trust Global Investments Limited; Northern Trust Securities LLP. Northern Trust Global Services SE, 10 rue du Château d’Eau, L-3364 Leudelange, Grand-Duché de Luxembourg, RCS B232281; Northern Trust Global Services SE UK Branch, 50 Bank Street, London E14 5 NT; Northern Trust Global Services SE Sweden Bankfilial, Ingmar Bergmans gata 4, 1st Floor, 114 34 Stockholm, Sweden; Northern Trust Global Services SE Netherlands Branch, Viñoly 7th floor, Claude Debussylaan 18 A, 1082 MD Amsterdam; Northern Trust Global Services SE Abu Dhabi Branch, registration Number 000000519 licenced by ADGM under FSRA # 160018. The Northern Trust Company Saudi Arabia, PO Box 7508, Level 20, Kingdom Tower, Al Urubah Road, Olaya District, Riyadh, Kingdom of Saudi Arabia 11214-9597, a Saudi Joint Stock Company – Capital 52 million SAR. Regulated and Authorised by the Capital Market Authority License # 12163-26 CR 1010366439. Northern Trust (Guernsey) Limited (2651)/Northern Trust Fiduciary Services (Guernsey) Limited (29806)/Northern Trust International Fund Administration Services (Guernsey) Limited (15532) Registered Office: Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3DA. Northern Trust International Fund Administration Services (Ireland) Limited (160579) / Northern Trust Fiduciary Services (Ireland) Limited (161386),  Registered Office: Georges Court, 54-62 Townsend Street, Dublin 2, D02 R156, Ireland.