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.
- 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.
- 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.
- Responses to consultation can be submitted up until Jun. 1, 2021.
||Corp; Fiduciary; IA; Pension
||CP, PR 4/30/2021; ESG
||Compliance; Financial; Legal; Market Conduct; Operations; Outsourcing; Registration/Licensing; Reporting; Research; Risk; Suitability; Treasury
||Corporate; Equity; Pensions; Retirement Plan; Securities
|Reg. Last Update
Last substantive update on 05/03/2021