Cross-Border Voting in Europe

This paper investigates the difficulties in the cross-border exercise of voting rights by shareholders. The difficulties arise a result of differences in the company laws, securities laws and securities systems in the member-states of the European Union, which have all been set up decades ago to serve national purposes. In addition there are as uncertainties in the rules of private international law governing these securities systems. These differences cause serious problems where shares are increasingly held through cross-border chains of intermediaries from investors to custodian and depository banks, national and international clearing organisations and regional or global custodians. As a result the author concludes that Europe is in need of a new legal and practical infrastructure which would facilitate cross-border voting by shareholders. The consolidating stock exchanges and clearing markets will increase the necessity of such an infrastructure, but will in itself not provide this infrastructure. Legislation, on a European scale is required. In devising a new system, Europe should look at the United States, where a number of these problems have been overcome in the past. With the knowledge of hindsight, Europe could probably even improve on the US system.