Download or read book The Regulation of Proxy Advisors written by Lars Klöhn and published by . This book was released on 2014 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: Proxy advisors provide institutional investors, particularly funds with widely-diversified portfolios, with recommendations for the exercise of their shareholder voting rights. This gives proxy advisors influence on the fate of stock corporations. The power of proxy advisors has attracted the attention of regulators throughout the world. The following contribution gives an overview of, and evaluates the market for, proxy advice from a law-and-economics perspective, analyzes empirical data gathered to date about their usefulness, and discusses various approaches to possible regulation.

Download or read book Regulation of Proxy Advisors in the U S and in Europe written by Julia Anna Mayer and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book A Defense of Proxy Advisors written by George W. Dent and published by . This book was released on 2015 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: Proxy advisors have dramatically transformed shareholder voting. Traditionally, even large institutional investors tended to follow the Wall Street Rule -- vote with management or sell your stock -- because the economics did not justify incurring any expense in deciding how to vote. The emergence of proxy advisors who perform proxy research for a modest fee paid by each of thousands of institutions now enables these investors to vote intelligently. New laws and rules have also expanded the range of matters on which shareholders vote. Because of these developments, business managements can no ignore but must cater to shareholder interests.However, corporate managers resent being dethroned. They are mounting a campaign to press the SEC to impose new regulations to hobble proxy advisors and, thereby, to neutralize institutional shareholders.This article reviews the charges leveled against proxy advisors and the new regulations proposed by their critics. It finds the complaints mostly unwarranted. Institutional investors are sophisticated and market forces minimize any problems with proxy advisors. With a few minor exceptions, new regulations are not needed and would be counterproductive.

Download or read book The Agency Cost Case for Regulating Proxy Advisory Firms written by QC Tingle (Bryce) and published by . This book was released on 2016 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: The current market for proxy advice arises out of an agency problem, but not the one usually assumed. Investment fund managers have relatively few economic incentives to invest effort on corporate governance and so they tend to organize around picking the best stocks and trading those stocks at the optimal time. This creates a market for third party proxy advisors, but both investment managers and proxy firms bear few of the costs of poor governance and operate under incentives to keep proxy advice as inexpensive as possible.Empirical evidence drawn from the academic studies performed on this market, along with trends revealed by submissions to the SEC and CSA, show significant problems with the content of proxy advice (including mistakes in what produces good corporate governance and frequent errors in voting recommendations) along with problems in the process by which the advice is delivered (including insufficient information for advisors to comply with their own voting guidelines, conflicts of interest, opacity, and an apparent inability to correct errors.)The case for regulatory intervention in the market for proxy advice can be stated quite simply: (1) there is empirical evidence of significant, repeated informational failures produced by the market for third party proxy voting advice; (2) there is evidence these failures arise systemically as a logical consequence of the conflicts of interest of the agents that make up the market; and (3) there is evidence of significant externalities in the market for proxy advice, suggesting the value of good proxy advice is not captured by the agents that participate in the market and that high-quality advice is therefore underproduced. This is precisely the type of market failure securities regulation is designed to fix. The paper concludes by recommending the modest application of traditional disclosure tools to the market for proxy advice.

Download or read book The Economics of Credit Rating Agencies written by Francesco Sangiorgi and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Economics of Credit Rating Agencies explores the economic and regulatory issues and frictions associated with credit rating agencies in the aftermath of the financial crisis. While ratings and other public signals are important, they can discourage independent due diligence and be a source of systemic risk. The authors highlight the diverse underlying views towards these competing approaches to reducing systemic risk and discuss the subtle contrasts between credit rating agencies and other types of due diligence providers, such as auditors, analysts and proxy-voting advisors. After an introduction, Section 2 provides a broad discussion of ratings in the regulatory framework, as well as how ratings potentially crowd out private information production and the risks associated with overreliance on ratings in market pricing. Section 3 contrasts credit rating agencies with alternative gatekeepers, such as auditors, analysts and proxy-voting advisers. Section 4 describes the difficulty of selling information and the underpinnings of the payment model for various financial information intermediaries under alternative assumptions. Section 5 discusses of rating agency analyst conflict of interest. An important aspect of credit ratings is the feedback effect that arises when a firm's behavior responds to the change in the cost of funding that is influenced by the rating. Feedback effects arise because of contractual triggers, but also through coordination and learning channels. Section 6 discusses these channels and especially the learning channel. Section 7 discusses selection issues including rating shopping and the contrast between solicited and unsolicited credit ratings. Section 8 contrasts ratings across products, including sovereign debt, and rating agencies. The nature of competition and the role of entry and reputation in the credit rating agency space are explored in Section 9. Section 10 examines why ratings matter, as well as techniques for identifying the real effects of ratings. The authors provide concluding observations and takeaways about rating agencies that emerged as a byproduct of the financial crisis in Section 11.

Download or read book Examining the Market Power and Impact of Proxy Advisory Firms written by United States. Congress. House. Committee on Financial Services. Subcommittee on Capital Markets and Government Sponsored Enterprises and published by . This book was released on 2013 with total page 444 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Concerns About the Quality and Influence of Proxy Advisors and Its Implications for the Preparations of the Shareholders Meeting written by Albert Verdam and published by . This book was released on 2020 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: After highlighting the importance of the votes cast by institutional investors in shareholders meetings of listed companies, and the role proxy advisors play in this respect, this article turns to the points of criticism that are strongly emphasized in American literature, as well as to the state of regulation on both sides of the Atlantic, also including the stern action the SEC has been taken recently with respect to proxy advisors. On the basis of a questionnaire issued to Dutch listed companies, I shed light on the perception of listed companies of the actions of proxy advisory services. I will conclude with a few reflective remarks, also about the consequences of the growing role of proxy advisors for the preparation of the shareholders meeting dynamics surrounding the shareholders meeting.

Download or read book Proxy Advisory Firms Under ESMA s Microscope written by Konstantinos Sergakis and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Proxy advisory firms have become influential players in the financial markets as they offer important services to investors, including notably recommendations in the exercise of voting rights. The relationship between companies and shareholders thus depends, to a certain extent, on how well proxy advisors fulfil their full range of duties towards their clients. Taking into account the current heavily-debated issue about bridging the gap between companies and investors in terms of communication, understanding and alignment of objectives, considerable attention has been given to the potential introduction of a regulatory framework to ensure that the services provided to investors remain reliable. There has already been a large amount of criticism as to whether such a reform is appropriate in a sector that has traditionally functioned without a set of legal rules or principles. This criticism is mainly due to the traditional conception of the service provided, which involves solely the client and not the rest of the market.Following ESMA's Final Report on the Proxy Advisor Industry, this paper seeks to analyse current European efforts aimed at making these activities more transparent and interactive with the rest of the market. Moreover, it discusses the usefulness of the introduction of high-level principles as suggested by the ESMA Report, and critically challenges the proposed framework. Lastly, as its main findings, the paper notes the questionable efficiency of the future regulatory steps detailed in the Report, while proposing an alternative EU regulatory pathway, namely the adoption of an EU Stewardship Code applicable to a wide range of market actors, which could prove more effective in making the entire investment and voting procedure much more transparent and suited to investors' needs.

Download or read book An Exploration of the Role of Proxy Advisors in Proxy Voting written by Albert Verdam and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Proxy advisors advise institutional investors on how to vote as shareholder in the companies of which shares are held in their investment portfolio. Proxy advisors have a great deal of influence. Their voting recommendations have an impact on the decisions of companies. This paper focuses on the phenomenon of proxy advisors in more detail, and on Institutional Shareholder Services (ISS) in particular. The paper looks at their influence, various aspects of their working methods and their transparency, as well as discusses questions about the conflicts of interest that present themselves in this connection. Furthermore it discusses the applicable legislation and regulations as well as the question whether the level playing field of proxy advisors and their influence are a desirable situation. Questions that need to be addressed are not only about the concentration of 'voting power' and conflicts of interest. They also concern the desirability of the shift of the influence of institutional investors to proxy advisors as a kind of 'external agencies' which are distanced from both their clients and the companies they advise on, and the way in which they arrive at their advice.

Download or read book Investment Adviser Regulation written by Clifford E. Kirsch and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investment Adviser Regulation: A Step-by-Step Guide to Compliance and the Law gives you the thorough regulatory guidance you need to understand the rules currently governing investment advisers while ensuring you keep pace with the tougher rules to come. This straightforward, easy-to-read compliance resource shows you how to file and update the pivotal Form ADV and draft compliant advisory contracts.

Download or read book Understanding New Challenges in the Investment Advisory Business written by Taeho Lee and published by . This book was released on 2016 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Shareholder Rights Directive II written by Hanne S. Birkmose and published by Edward Elgar Publishing. This book was released on 2021-04-30 with total page 344 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Commentary is the first comprehensive work to analyse the revised EU Shareholder Rights Directive (SRD II). SRD II sets a new agenda for engaged shareholders and sustainable companies in the EU, sparking a wider debate on the adoption of duties in company and capital markets law. By providing a systematic and thorough framework for analysis, this Commentary evaluates the purpose and aims of SRD II and further enriches the debate on the usefulness of the EU’s drive to encourage long-term shareholder engagement.

Download or read book Investment Adviser s Legal and Compliance Guide written by Terrance J. O'Malley and published by Wolters Kluwer. This book was released on 2013-01-01 with total page 1060 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investment Adviser's Legal and Compliance Guide, Second Edition is an invaluable guide written to assist attorneys and investment advisers in both drafting their compliance policies and procedures and reviewing them annually. In addition, the book serves as a practical tool for experienced attorneys and compliance officers for fulfilling their changing responsibilities under new rules adopted under the Investment Advisers Act of 1940, as well as new staff interpretations and guidance. For the Second Edition, the original author, Terrance J. Oand’Malley, is joined by John H. Walsh. While both authors are seasoned practitioners and acknowledged experts in the area of investment adviser compliance matters, Mr. Walshand’s years of experience, including at the SEC, are reflected in the enhanced practical discussion of relevant legal and compliance issues, including increased numbers of compliance tips, enforcement and regulatory alerts, and compliance tools. Investment Adviser's Legal and Compliance Guide, Second Edition covers in detail such topics as: Filings and amendments that an adviser must make to maintain its SEC registration Major rules and requirements dealing with marketing and attracting new clients Issues arising in connection with the management of private funds The SEC's examination process New clients, and the management of client accounts. The book also covers requirements relating to the adviser's obligation to its customers, including preventing insider trading and other trading abuses, as well as an adviser's recordkeeping, which is a major factor in meeting the requirements of the Investment Advisers Act. In addition, Investment Adviser's Legal and Compliance Guide, Second Edition provides registered investment advisers and their legal counsel with a comprehensive review of their compliance responsibilities that arise under the Investment Advisers Act.

Download or read book Practical Guide to SEC Proxy and Compensation Rules 6th Edition written by Goodman, Fontenot and published by Wolters Kluwer. This book was released on 2018-11-21 with total page 2156 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Practical Guide to SEC Proxy and Compensation Rules, Sixth Edition is designed to meet the special needs of corporate officers and other professionals who must understand and master the latest changes in compensation disclosure and related party disclosure rules, including requirements and initial SEC implementing rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Current, comprehensive and reliable, the Guide prepares you to handle both common issues and unexpected situations. Contributions from the country's leading compensation and proxy experts analyze: Executive compensation tables Compensation disclosure and analysis Other proxy disclosure requirements E-proxy rules Executive compensation under IRC Section 162(m) And much more! Organized for quick, easy access to all the issues and areas you're likely to encounter in your daily work, A Practical Guide to SEC Proxy and Compensation Rules Dissects each compensation table individually--the summary compensation table, the option and SAR tables, the long-term incentive plan table--and alerts you to the perils and pitfalls of each one Walks you through preparation of the Compensation Disclosure and Analysis Explains the latest interpretations under the SEC's shareholder proposal rule and institutional investor initiatives and what they mean for the coming proxy season Helps you tackle planning concerns that have arisen in the executive compensation context, including strategies for handling shareholder proposals regarding executive compensation and obtaining shareholder approval of stock option plans The Sixth Edition reflects the latest SEC and IRS regulations, guidance, interpretations and disclosure practices. It adds a new chapter focused on developments and practices relating to required public company "say-on-pay" advisory votes pursuant to the Dodd-Frank Act. Another new chapter addresses director qualifications and Board leadership, diversity, and risk oversight disclosures. This one-volume guide will help you prepare required disclosures as well as make long-range plans that comply fully with regulations and positions taken by the SEC more quickly and completely than ever before. In addition, we've updated the Appendices to bring you the latest rules and relevant primary source material. Previous Edition: Practical Guide to SEC Proxy and Compensation Rules, Fifth Edition ISBN 9780735598959

Download or read book Handbook for the Conduct of Shareholders Meetings written by and published by Corporate Governance Committee Section of Business Can Bar A. This book was released on 2000 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Comment Letter to the SEC written by Bernard S. Sharfman and published by . This book was released on 2018 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: This submission is in response to Chairman Clayton's July 30 press release announcing a staff roundtable on the proxy process and calling for submissions from interested parties. It refers in particular to proxy advisory firms and is distinguished from my October 8, 2018 comment letter that focused on additional disclosures by investment advisers to mutual funds. Given the potential for a proxy advisor's voting recommendations to have a significant impact on voting outcomes, it is critical that these recommendations be targeted toward enhancing long-term shareholder value. However, many critics of proxy advisors argue that a significant number of their voting recommendations incorporate various types of data, analytic, and methodological errors. If implemented, such voting recommendations will lead to sub-optimal corporate decision-making and a reduction in shareholder value. Such imprecision cannot be tolerated in a proxy advisor's recommendations. Specifically, this submission requests the Securities and Exchange Commission (“SEC” or “Commission”) to modify its rules, policies and guidelines to the extent that:When making a voting recommendation, the proxy advisor should be held to the standard of an information trader. If a proxy advisor cannot attest to the use of that standard when generating a voting recommendation, then the proxy advisor must abstain from making that recommendation to its clients. Making a recommendation that does not meet this standard would be a breach of a proxy advisor's fiduciary duty under the Advisers Act; The SEC, as well as the Department of Labor (“DOL”), should clarify that an institutional investor, as an alternative to using the voting recommendations of a proxy advisor, can meet its fiduciary voting duties by utilizing the voting recommendations provided by the board of directors; and Consistent with the prior recommendation and assuming that technical issues can be overcome, retail investors who invest in voting stock indirectly through the use of investment advisers and beneficiaries of public pension funds should have the option of transmitting voting instructions to their institutional investor informing it that their pro rata investment in voting stock must be voted in conformity with the voting recommendations of the board of directors of each company held in portfolio.

Download or read book A Practical Guide to SEC Proxy and Compensation Rules written by Amy L. Goodman and published by Aspen Publishers. This book was released on 1995 with total page 938 pages. Available in PDF, EPUB and Kindle. Book excerpt: Written by leading authorities, the Second Edition of A Practical Guide to SEC Proxy and Compensation Rules provides expert analysis and valuable tips and pointers on everything you need to know to master the proxy process and ensure compliance with the SEC's rules. You get comprehensive guidance on such essential issues as: Preparing the executive compensation tables and compensation committee report -- plus examples and the full text reports of seven companies -- Explanations of the FASB rules on accounting for stock options -- Discussions on the requirements necessary to ensure the tax deductibility of executive compensation under IRC Section 162(m) -- Descriptions of the disclosure requirements for a company seeking shareholder approval of certain employee benefit plans -- Analysis of institutional activism under the proxy rules -- And much more. Insightful analysis throughout this guide of how companies have responded to the SEC regulations and on the positions taken by the SEC will help you prepare day-to-day disclosures as well as long-range plans. Valuable appendixes contain SEC and DOL releases, rules and regulations.