AST GVT Proxy Advice Transparency


On Apr. 30, AST GVT consulted on transparency of proxy advice.


  • AST GVT issued a consultation paper titled Greater transparency of proxy advice that seeks feedback on use and regulation of proxy advisers, as part of firm's governance.
  • Overview
  • Proxy advisers provide reports to institutional shareholders containing research on Australian stock exchange (ASX) companies, providing AGM voting recommendations.
  • Among the shareholders they advise are superannuation funds who make decisions on behalf of the millions of Australians who have their pension savings invested in shares.
  • Collectively, superannuation funds own around 20 per cent of the ASX, worth around $440 billion, and market for proxy advice in Australia is dominated by just four firms.
  • It is important therefore that proxy advice is transparent and its quality and accuracy can be relied upon by investors and companies that are the subject of their reports.
  • There is currently very limited regulation on how any of this existing proxy advice is either formulated, provided, used and disclosed and to whom, presenting problems.
  • Consultation
  • Given the influence of proxy advisers on the conduct of businesses listed on the ASX, AST GVT is consulting on measures to facilitate greater transparency of proxy advice.
  • For proxy advisers, the consultation will consider whether requirements are needed for them to obtain an Australian Financial Services License for provision of proxy advice.
  • Also, to provide their research and voting recommendations to the company that is the subject of their report at least five business days before providing it to their clients.
  • They are also to be expected to notify their clients about how to access the company’s response to the report and if client is superannuation fund, be independent from client.
  • For superannuation funds, consultation will consider a need to make publicly available information on voting records, including whether this was consistent with the advice.
  • Also, to outline exercise of independent judgement in reaching their voting positions.
  • Effectiveness
  • Responses to consultation can be submitted up until Jun. 1, 2021.

Regulators AST GVT
Entity Types Corp; Fiduciary; IA; Pension
Reference CP, PR 4/30/2021; ESG
Functions Compliance; Financial; Legal; Market Conduct; Operations; Outsourcing; Registration/Licensing; Reporting; Research; Risk; Suitability; Treasury
Countries Australia
Products Corporate; Equity; Pensions; Retirement Plan; Securities
Regions AP
Rule Type Proposed
Rule Date 4/30/2021
Effective Date 6/1/2021
Rule Id 104364
Linked to N/A
Reg. Last Update 4/30/2021
Report Section International

Last substantive update on 05/03/2021