ESMA Recommends Proxy Advisor Code of Conduct


On February 19, the European Securities and Markets Authority (ESMA) published a Feedback Statement on its March 2012 consultation on the role of the proxy advisory industry as service providers to institutional investors with holdings in European-listed companies.

ESMA concluded that there was no clear evidence of current market failures relating to the actions of proxy advisors. Accordingly, ESMA will not impose a regulatory regime on the proxy advisory industry at this time. However, ESMA advised that the proxy advisory industry develop an industry code of conduct, since there were a number of concerns identified regarding potential conflicts of interest and the independence of proxy advisors and also relating to the accuracy and reliability of the advice that they provide. In the Feedback Statement, ESMA encouraged that the general considerations and principles for the code of conduct focus on:

• identifying, disclosing and managing conflicts of interest; and

• fostering transparency to ensure the accuracy and reliability of advice.

ESMA will review the development of the industry code of conduct in February 2015 at which time it may decide to impose regulatory measures.

Read more.


Written by:

Published In:

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Katten Muchin Rosenman LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.