On May 9, CHI AMAC issued rules for fund managers re governance.
CHI AMAC released Rules for publicly offered securities investment fund managers to participate in the governance of listed companies; template for disclosing voting rights.
Highlights of Rules
Participation in the governance of listed companies refers to the fund manager exercising shareholders' rights on behalf of the interests of the fund's unitholders, such as voting rights in respect of listed companies in which the fund has invested.
Outlines the principles for fund managers, including giving priority to the interests of unitholders, preventing conflicts of interest, professional and independent judgment.
Fund managers shall pay attention to the operation of listed companies they invest in.
Establish standards for participating in the governance of listed companies based on the fund's investment strategy and the proportion of its holdings in the listed company.
Fund managers should observe the listed company's behavior, such as whether the development strategy is sustainable and whether it is in line with the national strategy.
The fund manager shall exercise shareholder rights through shareholders meetings, performance briefings, submission of shareholder proposals, nomination of directors.
Establish a system and process for exercising voting rights on behalf of the fund.
If the total holding of a single stock held by the fund accounts for 5% or more of its circulating share capital, the fund manager shall exercise voting rights such as decision-making rights, the election or removal of directors, related-party transactions.
Rules cover internal control, information disclosure requirements and self-regulations.
Effectiveness
Rules take effect immediately; fund managers shall report details of the exercise of voting rights in years 2023 and 2024 to CHI AMAC on or before Jun. 30, 2025.
Starting from 2026, fund managers shall report it before the end of Apr. each year.
