Advocacy Update: CIRI Comments on Proposed National Policy 25-201 Guidance for Proxy Advisory Firms

CIRI submitted comments to the Canadian Securities Administrators on Proposed National Policy 25-201 Guidance for Proxy Advisory Firms.

CIRI expressed disappointment that the CSA opted for voluntary guidelines over regulations that do not address all of the issues we originally raised in our submission from September 2012. CIRI has therefore prepared further comments, including the following recommendations:

• the Proposed Policy is not sufficiently forceful and a regulatory approach would be more effective;
• PAFs should prominently identify in the research reports and voting recommendations provided to their institutional investor clients any specific potential conflicts of interest with regard to the issuer and analyst/reviewer ownership interests;
• PAFs should be required to provide to all issuers draft research reports and voting recommendations for review for factual accuracy allowing 48 to 72 business hours for issuers to respond prior to the report being distributed to the PAF’s clients;
• PAFs should obtain confirmation that their clients have reviewed and agree with the PAF’s proxy voting guidelines leading to vote recommendations;
• PAF analysts should be required to meet minimum standards of training, education, certification or experience; and
• should the CSA proceed with voluntary guidelines, they should conduct a comprehensive review of the guideline adoption by PAFs one year after promulgation of final guidelines to determine if the objectives of improved transparency, accuracy and engagement have been achieved.

To view the complete submission, click here.

If you have any questions about this issue, or CIRI’s comments, please contact Yvette Lokker.