The deadline for comments on ESMA’s discussion paper on policy options for the proxy advisory industry closes on 25 June 2012. A proxy adviser is a firm that analyses the resolutions presented at the general meetings of listed companies in order to submit voting advice or recommendations on these resolutions to their clients. The discussion paper focuses on the development of the proxy advisory industry in Europe, which mainly serves institutional investors such as asset managers and certain funds. ESMA has carried out research and, on the basis that the proxy advisory industry is growing, is researching the extent to which market failures relating to the activities of proxy advisers exist.
The discussion paper explores the factors which influence the accuracy, independence and reliability of proxy advice such as the potential for conflicts of interest to play a role, proxy advisers' methodology and their dialogue with issuers. It also deals with the degree of transparency on management of conflicts of interest, dialogue with issuers, the voting policies and guidelines, the voting recommendations, and the procedures for elaborating a voting recommendation report.
For a link to the discussion paper, please click here.