On 22 March 2012, the European Securities and Markets Authority (‘ESMA’) published a discussion paper asking for views on the regulation of the EU proxy advisory industry. This initiative follows concerns about the role of such advisors, appointed by the large institutional investors, among other things, to analyse proposals for general meetings and to make voting recommendations. The discussion paper focuses particularly on the following:  

  • the factors which influence the accuracy, independence and reliability of proxy advice (including possible conflicts of interest); and  
  • the level of transparency involved, for example, in the management of conflicts of interest and in the making of voting recommendations.  

ESMA seeks views on the following possible policy options:  

  • whether it is necessary for the EU to take any action at this stage;
  • whether individual member states should be encouraged to develop enhanced standards for regulating proxy advisers;
  • whether the EU should introduce quasi-binding regulatory measures (such as ESMA guidelines and recommendations); or  
  • whether the EU should implement binding legislative measures.  

Comments are requested by 25 June 2012. ESMA aims to publish a feedback statement later this year and will indicate then whether it considers policy action should be taken.  

An Overview of the Proxy Advisory Industry: Considerations on Possible Policy Options available at: