Fund managers come together to voting advisers’ protection
Europe’s asset management industry has arranged to protect voting advisory firms, whom they utilize for research on corporate governance, from the risk of binding regulation from the EU – although some managers showed support for softer, quasi-voluntary rules.
Presenting a noticeably joint front, firms like Aviva, BlackRock, Amundi, F&C and Legal & General Investment Management have all told the European Securities & Markets Association which there is no need to subject consultants to binding EU regulation.
They argued because the obligation for casting votes on company directors’ pay, and other issues, lies with fund managers unaccompanied. They said they utilized advisers only for the information, and argued that they had a “disproportionate influence” on the result of AGM votes.
It was its “strong faith” that regulation was not compulsory, as “there is no proof of wrongdoing on the side of substitute advisers”, said by Amundi.
Robert Hardy, JP Morgan’s head of corporate governance, said “We agree with the view which there is no need for EU-level deed at this time.” Nathan Leclerq, Aviva Investors’ head of corporate governance, wrote: “We do not think there is a case for regulatory intervention.”
Esma declared in February it would be appearing into the role of voting advisers, with regulation potentially to pursue in the late part of 2012. Its consultation antedates the supposed “shareholder spring”, but yet has been conducted against the background of the most disturbed AGM season in years.
Some EU and US companies are encouraging of binding regulation. In its reply, Symrise AG said, a German manufacturer of aromatic chemicals, “We choose a binding EU level regulatory instrument. We look for constant standards for all market participants in Europe.”
The company proposed advisers should have to start their “causes and arguments [for] voting recommendations “, and also added: “Certain minimum needs about the qualifications of a proxy adviser’s staff are also compulsory. We could consider about a comparable approach as useful to the banking sector; ie. post-qualification experience, particular capital markets experience, proven reliability etc.” Apply now with loans in minutes @ www.loaninminutes.co.uk and a get easy loan.
The US Chambers of Commerce also answered to the Esma consultation, indicating “steps should be taken” to resolve substitute firms’ “lack of transparency” and “conflicts of interest that may hurt clients, issuers, and the market as an entire.”
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