On Friday evening, the members of the National Assembly of the Republic of Slovenia adopted the amending act to the Book Entry Securities Act (ZNVP-1) in the third reading with 70 votes for and 4 against, and which to a large extent draws on the VZMD's proposals to alleviate the catastrophic impact of the amending act of the ZNVP-1, which namely brings with it the abolishment of the registry accounts for about 260,000 natural persons. Following the unanimous support to the amendment of the ruling coalition within the 2^nd reading on Wednesday September 23, 2015, the members also supported, with 69 votes for and 4 against, the additional amendment to the Article 48 of the ZNVP-1, tabled by the deputy group of the Slovenian Democratic Party (SDS), which by means of its additional 3^rd paragraph shall limit the annual costs of keeping accounts and the compensation for the balance maintenance on the trading account to the maximum of 0.5% of the average value of securities on the account..

 

Following the support to VZMD to limit such costs, which have too frequently accounted for the significant part of the minority shareholder portfolio value, such additional amendment also followed the VZMD's opinion on the coalition's amendment, delivered to the National Assembly of the Republic of Slovenia on September 17, 2015, which is why it was supported by VZMD immediately upon its tabling, on Thursday, September 24, 2015. On this occasion, the VZMD President, Mr. Kristjan Verbič, welcomed the significant progress in handling registry accounts abolishment problems, which »nevertheless reflects a certain extent of regard to uphold minority shareholders and regulate the status of investors - particularly those who are keen on being part of the Slovenian joint-stock companies, and in this manner maintain and increase effectiveness of tied up resources, save for their old age, healthcare services, education of their offspring, etc.« and was also pleased about the fact that the »the party politics was finally unified and responded to the VZMD's appeal to make slight additional efforts when formulating the definitive text of Article 48 of the ZNVP-1 proposal, and, after all already invested efforts and adjustments, to reach a solution which could be classified as acceptable and optimal in the usual context of the claimed urgency .«

Note that, ever since the drafting of the mentioned Act, VZMD has vigorously opposed the abolishment of the registry accounts at the Central Securities Clearing Corporation (KDD), where nearly 260,000 minority shareholder have their securities freely deposited, which have been largely acquired through ownership certificates. As it has been proved necessary that the abolishment of the registry accounts could not be avoided, VZMD, on September 4, 2015 put forward a compromise proposal, which represented to a large extent a foundation also for the amendment of the ruling coalition. The latter provided for the delay of the natural person registry account abolishment into 2017, and ushered in the direct reporting by the KDD. Thus, for at least 100,000 minority shareholders - who hold shares worth up to EUR 100 on their registry accounts at KDD - the amendment brings court fee exemption in the event that they do not transfer their shares to trading accounts at brokerage firms or banks which would consequently lead to transfer to the court deposit after January 1, 2017. In this regard, VZMD firmly raised the question of methods for valuation of shares on registry accounts and of the inappropriateness of the very low limit of EUR 100 up to which the shareholders are entitled to the court fee exemption.

However, as early as in February this year, VZMD sent to the Ministry of Finance of the Republic of Slovenia even an Urgency, with which they reiterated that Ministry, among other things was proposing abolishment of registry accounts at KDD, obscuring ownership structures, lowering the level of legal security, making it more difficult to attend meetings, additional financial and social burdens, explicitly reducing the number of minority shareholders and the proportion of local ownership in Slovenian companies etc. The first proposed amending act of the ZNVP-1 namely bore all the more serious consequences for the capital market, especially for over 260,000 Slovenian minority shareholders (natural persons), who might be the next year relentlessly deleted from the register of shareholders, that is, they might lose their shares in the face of abolishment of (their) registry accounts at the KDD, or »punished« with the court fees for the automatic court deposits of their shares. That is why VZMD has insisted on scathing criticism of such amending act of the ZNVP-1, which was anew pointed out by the VZMD President also in the meeting of the Finance and Monetary Policy Council of the National Assembly of the Republic of Slovenia on Wednesday, September 2, 2015. (RECORDING of the meeting – VZMD caveats and proposals from 51:40 minute onwards)

Even beforehand, VZMD had frequently voiced against the proposed abolishment of the registry accounts (inter alia also using the remarks and proposals regarding the ZNVP-1 on October 28, 2014, November 26, 2014 and February 5, 2015), in addition, VZMD has since October 2014 been actively engaged in harmonizing the text of the Proposed directive of the European Parliament and Council of the EU regarding changes to the 2007/36/ES directive regarding encouraging the long-term shareholder engagement and 2013/34/EU directive regarding specific elements of the declaration about corporate governance. Regarding the Proposed directive directly related to the Proposed amending act of the ZNVP-1, VZMD, as early as on October 6, 2014 sent its remarks and proposals - in line with the Better Finance proposals (European Federation of Financial Services, where Mr. Verbič is a member of the Executive Board) - also to directly to the Ministry for Economic Development and Technology.