Mumbai: The Securities and Trade Board of India (SEBI) on Monday got here up with a set of procedural pointers for proxy advisors.
Proxy advisory corporations advise shareholders on company governance-related points and provides suggestions concerning voting on resolutions.
In a round, SEBI mentioned that proxy advisors shall formulate the voting suggestion insurance policies and disclose the up to date voting suggestion insurance policies to its purchasers.
“Proxy advisors shall ensure that the policies should be reviewed at least once annually. The voting recommendation policies shall also disclose the circumstances when not to provide a voting recommendation,” it mentioned.
They’d additionally should disclose the methodologies and processes adopted within the growth of their analysis and corresponding suggestions to its purchasers, as per the rules. The advisors shall alert their purchasers inside 24 hours of receipt of details about any factual errors or materials revisions to the report.
The market regulator has made it necessary for the proxy advisors to share their report with their purchasers and the corporate on the identical time.
“This sharing policy should be disclosed by proxy advisors on their website. The timeline to receive comments from the company may be defined by proxy advisors and all comments/clarifications received from the company, within the timeline, shall be included as an addendum to the report,” mentioned the Sebi round.
If the corporate has a distinct viewpoint on the suggestions acknowledged within the report of the proxy advisors, then the advisors, after making an allowance for the mentioned viewpoint, might both revise the advice within the addendum report or concern an addendum to the report with its remarks, as thought of acceptable.
Amongst different necessities, the round mentioned: “Proxy advisors shall disclose battle of curiosity on each particular doc the place they’re giving their recommendation. Additional, the disclosures ought to particularly tackle the doable areas of potential battle and the safeguards which were put in place to mitigate doable conflicts of curiosity.
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