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In connection with the spread of Covid-19, the Financial Market Commission (“CMF”) issued General Rule No. 435 (“NCG 435”) and Circular Letter No. 1,141, which regulate and clarify some aspects regarding remote participation and voting at shareholder’s meetings.

Among the matters regulated, the CMF provides that, in the shareholders meeting of listed companies, technological resources may be used to allow the participation of shareholders who are not physically present at the place where the meeting is held, including remote voting mechanisms.

1.     Conditions

For the participation of shareholders and the casting of remote votes, the systems used for this purpose are required to:

a)  Duly guarantee the identity of the assisting shareholders or their proxies if applicable;
b)  Guarantee the participation of the CMF if required by law; and
c) Safeguard the principle of simultaneity or secrecy off all votes taken as such meetings.

2.     Company authorization

It is up to the board of listed companies to implement the systems or procedures necessary for guaranteeing:

a)  The identity of the persons who participate remotely in the meetings;
b)  That they have the powers that allow persons to act on behalf of a shareholder, if they are not acting on their own representation; and
c)  The confidentiality of the votes cast remotely until the end of the counting process to the others votes on the day of the meeting.

3.     Meeting summons

Meeting summons must be indicate:

a)  The fact that remote participation and voting will be allowed;
b)  That they have the powers that allow persons to act on behalf of a shareholder, if they are not acting on their own representation; and
c)  The confidentiality of the votes cast remotely until the end of the counting process to the others votes on the day of the meeting.

4.     Attendance records

The records of attendance of the meetings must include information about the shareholders who have used these mechanisms and the minutes must mention that these means were used, in addition to the others matters which the law and regulations require to be incorporated into them.

5.     Participation of the Chairman

The use of technological mechanisms for remote participation in meetings by shareholders is also permitted to other persons who, by law and regulation, statutory or contractual, are required to do, such as the chairman of the meeting, provided that those mechanisms duly guarantee the identity of these persons.

6.     Meeting called previous to March 18, 2020

It is allowed that meetings which notifications were made prior to March 18, 2020 may use technological means that allow the participation of persons who are not physically present in the place where the meeting is held together with remote voting mechanism, according to the terms of the NCG 435. In that case, it is enough to inform in accordance with the requirements of Article 10 of Securities Market Law (through public disclosure), with sufficient notice before the date of the meeting.

Circular Letter No. 1,141 clarifies that the above rules may be applied by all listed companies, even if they have not contemplated the mechanisms that allow remote participation and voting in their bylaws, as long as the provisions of NCG 435 are fulfilled.

7.     Force Majeure

In the event that, as a consequence of limitations imposed by the authority or if the necessary means are not available, and therefore it is impossible to celebrate the shareholders meetings in person or remotely (duly and in a timely manner), force majeure may be alleged to suspend or postpone them. These circumstances will be evaluated on their merit by the CMF.

Santiago march 20, 2020

 

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“This Newsletter does not constitute legal advice and Guerrero Olivos will not be responsible for acts or omissions from third parties based on the information contained herein”.