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Listed Entities Can Approach Sebi To Resolve Grievances After New Norms On Proxy Advisory

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Listed Entities Can Approach Sebi To Resolve Grievances After New Norms On Proxy Advisory
PTI - 04 August 2020

New Delhi, Aug 4
Listed companies may approach Sebi to resolve grievances against proxy advisors, who advise shareholders on corporate governance issues and assist them with voting recommendation, the market regulator said on Tuesday.

This will be applicable from September 1, according to a Securities and Exchange Board of India (Sebi) circular.

The regulator noted that proxy advisors, over the past few years, have played a key role in enabling shareholders to effectively participate in corporate governance decisions

Proxy advisors provide advice to institutional investors or shareholders of a listed entity, in relation to exercise of their rights in the company including voting recommendation on agenda items.

However, due to the inherent nature of the work, it is probable that proxy advisors and listed entities may have different views on any agenda item of the listed entity leading to grievances, Sebi said.

"In order to facilitate resolution of such grievances of listed entities against Sebi registered proxy advisors, the listed entities may approach Sebi," the regulator added.

The market watchdog will examine the matter for non-compliance by proxy advisors with the provisions of the code of conduct specified under Research Analyst Regulations and the procedural guidelines for proxy advisors.

On Monday, the regulator came out with procedural guidelines for such advisors.

Under the guidelines, they will have to formulate the voting recommendation policies and disclose the updated voting recommendation policies to clients.

The proxy advisory firms must ensure that the policies be reviewed at least once annually.

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