The Securities and Exchange Board of India (Sebi) has asked asset management
companies (AMCs) to inform it on an “urgent basis” about the steps taken by them
with respect to their role in ensuring better corporate governance of listed
companies.
The stock market regulator sent a letter last week to mutual fund (MF) houses
in this matter, according to persons familiar with the matter.
In March last year, the stock market regulator had mandated AMCs to disclose
their general policies and procedures for exercising the voting rights in
respect of the shares held by them on their websites as well as in the annual
report distributed to the unit holders from the financial year 2010-11.
As per Sebi norms, AMCs are also required to disclose on their websites as
well as in the annual report from 2010-11 the actual exercise of their proxy
votes in the annual general meetings/extraordinary general meetings (AGMs/EGMs)
of the investee companies. The matters on which AMCs are required to disclose
their proxy votes include changes in the state of incorporation, merger and
other corporate restructuring, anti-takeover provisions, changes to the capital
structure, including increases and decreases of capital and preferred stock
issuances, among other things.
However, there is no uniformity in the term disclosures made by fund houses.
For example, Quantum MF and Mirae MF have put out both the proxy voting policy
as well as the details of the exercise of proxy votes in the AGMs/EGMs of
companies in which they have made investments.
There are some mutual fund houses such as Reliance MF, Religare MF, UTI MF,
Fidelity MF and Birla Sun Life MF, which have just disclosed their proxy voting
policies on their websites.
When contacted, a couple of fund houses said they would disclose the details
of their proxy votes at the time of sending their annual reports.
Sebi has asked fund houses to upload the details of proxy votes by May 31 on
their websites, said the chief executive officer of a domestic fund house.
Officials at some other fund houses were not very clear about the deadline.
“Mutual fund houses should not wait to disclose the details about their proxy
votes till they send their annual reports. They should upload this information
as soon as possible after the exercise of the proxy vote,” said one of the
members of the mutual fund advisory committee.
Sebi’s objective to mandate fund houses to disclose their proxy voting policy
and proxy votes was to make them play an active role in ensuring better
corporate governance of listed companies.
Source: Business Standard
Source: Business Standard