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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.

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