SEBI should handle proxy firms’ disputes’

  1. Securities and Exchange Board of India(SEBI) had set up a working group on issues related to proxy advisors in 2018.The group was headed by Sandeep Parekh.
  2. Proxy adviser is a person who provides advice to institutional investors or shareholder of a company in relation to exercise of their rights in the company including recommendations on public offer or voting recommendation on agenda items.
  3. The panel has proposed a code of conduct involving a comply or explain approach for proxy advisory firms wherein companies aggrieved by the view of proxy firms can approach the SEBI for redressal.
  4. The panel has also proposed that all proxy advisors should have a publicly available conflict of interest policy.The policy should have a clear approach on managing concerns relating to independence that could impact their recommendations provided to clients.
  5. The panel has also recommended proxy firms to have clear separation between the proxy voting advice to shareholders and the advice to listed companies regarding advisory services.
  6. The panel has said the board of proxy advisors should be independent of its shareholders where such a position creates a serious conflict of interest.