Clifford Chance
Amendment to the Capital Markets Act and its impact on corporate governance of Czech listed companies
9 January 2020
On 1 October 2019, an amendment to Act No. 256/2004 Coll., the Capital Markets Act, came into force and was published in the Collection of Laws as Act No. 204/2019 amending certain laws in relation to the exercise of the shareholders' rights (the "Amendment"). The Amendment transposes Directive (EU) 2017/828 of the European Parliament and of the Council of 17 May 2017 (the "Directive") and introduces new obligations for companies with registered office in the Czech Republic whose shares (but not debt instruments) are traded on a European regulated market as well as for companies located outside the Czech Republic which have chosen the Czech Republic as reference Member State (i.e. whose shares are traded on the Czech regulated market) (the "listed companies").
The Amendment introduces two important obligations for the listed companies: (i) the obligation to approve and disclose material transactions made between a listed company and its related party, and (ii) the obligation to prepare, approve and disclose a remuneration policy for governing and supervisory bodies of the listed companies.
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