Wednesday, October 13, 2021

SEC Expands Investment Company Proxy Disclosures

New Light on Funds' Securities Lending versus Proxy Voting

Author: David Schwartz J.D. CPA

On September 29, 2021, the Securities and Exchange Commission issued a proposal to expand investment company disclosures of their proxy voting activities. If adopted, the rules would enhance the information mutual funds, exchange-traded funds, and other regulated investment companies are required to report on Form N-PX under the Investment Company Act. These expanded disclosures are intended to make proxy voting decisions made by investment company advisers more complete, accessible, and understandable to investors. 

Comments (0)
Number of views (2491)

Tuesday, October 20, 2020

Squaring ESG with Securities Lending

Compliance without Knowing the Borrower's Purpose - Is it Possible?

Author: David Schwartz J.D. CPA

Sustainable investing is becoming more important to investors when creating portfolios. As a result, institutions often follow policies with formal environmental, social, and governance (ESG) factors to guide their investments. They commit substantial resources to ESG research and produce comprehensive reports about their compliance.[1] But then the same institutions give away their proxy votes when they lend securities for fees to cover their bank charges. And the loans of those securities – and their proxies – go to borrowers with unknown intentions, and often with unknown identities.

Comments (0)
Number of views (7573)

Monday, September 22, 2014

UK's Financial Reporting Council Issues New UK Corporate Governance Code

Better Corporate Governance and Risk Management Through Shareholder Engagement

Author: David Schwartz J.D. CPA

The Financial Reporting Council (FRC), UK’s independent regulator responsible for promoting high quality corporate governance and reporting to foster investment, has issued a revised UK Corporate Governance Code.  The changes to the Code are designed to strengthen the focus of companies and investors on the longer term and the sustainability of value creation. One aspect of this refocusing is shareholder engagement.  The revised code seeks to ensure better communication between boards and shareholders by improving disclosure and transparency on proxy voting issues.  

Comments (0)
Number of views (17860)

Wednesday, September 17, 2014

Bank Directors May Find Themselves With a Heightened Standard of Care

To What Extent Should Regulators Dictate How Bank Boards Oversee Risk?

Author: David Schwartz J.D. CPA
A recent address by Federal Reserve Governor Daniel Tarullo has raised the specter of expanded fiduciary duties for bank directors.  Referencing a recent academic paper proposing a simple negligence standard for expanded board oversight responsibility for risk-taking by systemically important financial institutions, Mr. Tarullo discussed how the nature of finance and financial regulation affects corporate governance and why, in turn, special corporate governance measures are needed as part of an effective prudential regulatory system.
Comments (0)
Number of views (10974)

Sunday, June 15, 2014

Italy’s Mediobanca Equity Sell-off and Privatization Spark Renaissance in Corporate Governance

Author: David Schwartz J.D. CPA
The Economist reports that Mediobanca, an Italian investment bank formed in 1946 assist in the reconstruction of Italian industry, has commenced a planned sell-off of $2.2 billion in equity holdings as part of an effort to refocus the firm on its core mission of providing medium-term financing in the Italian sector. Mediobanca’s sales of these shares as part of its unwinding of webs of cross-shareholdings and pacts among big shareholders, as well as the privatization of Fincantieri and Poste Itliane, have released large volumes of shares on to the markets, allowing institutional and other investors to add them to their portfolios. This sudden flow of Italian equities in to the hands of new investors has, it seems, increased participation in corporate governance.
Comments (0)
Number of views (20706)
RSS
12