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Two EU member states however, have taken or are planning to take steps to address empty voting following discussion on possible regulatory reaction to the decoupling of voting rights.
ESMA describes its concern that derivative instruments may result in influence in a company without economic interest.
It cites two examples:
Example 1: An investor borrows shares in order to vote at the general meeting of shareholders of a company. Under the agreement, his economic exposure relating to the shares does not correspond to the amount of voting power he holds and he is not exposed to the long-term economic risk relating to the shares.
Example 2: An investor votes at the general meeting of shareholders even though he has sold his shares after the record date.
Responses to the original call for evidence can be seen here.
Published: 8 December, 2011