{"id":126116,"date":"2021-05-24T09:54:02","date_gmt":"2021-05-24T09:54:02","guid":{"rendered":"https:\/\/precoinnews.com\/?p=126116"},"modified":"2021-05-24T09:54:02","modified_gmt":"2021-05-24T09:54:02","slug":"australias-move-to-regulate-proxy-advisory-keeps-the-industry-divided","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/crypto\/australias-move-to-regulate-proxy-advisory-keeps-the-industry-divided\/","title":{"rendered":"Australia\u2019s Move to Regulate Proxy Advisory Keeps the Industry Divided"},"content":{"rendered":"<p><span>The Australian government is considering tightening regulations on the proxy advisors who provide services to institutional investors and is seeking industry consultation. The move has divided the industry as a part of it sees the proposals as too harsh, while others are welcoming it.<\/span><\/p>\n<p><span>Currently, only four proxy advisory firms are dominating the Aussie industry of institutional proxy voting solutions and the government wants more transparency in their operations.<\/span><\/p>\n<p><strong>Looking Forward to Meeting You at iFX EXPO Dubai May 2021 &#8211; Making It Happen!<\/strong><\/p>\n<p><span>\u201cCollectively, superannuation funds own around 20% of the Australian Stock Exchange (ASX), worth around $440 billion, and the market for proxy advice in Australia is dominated by just four firms,\u201d the consultation paper published earlier stated.<\/span><\/p>\n<p><span>\u201cIt is important therefore that proxy advice is transparent and its quality and accuracy can be relied upon by investors and companies that are the subject of their reports.\u201d<\/span><\/p>\n<h2><span>Need of the Hour<\/span><\/h2>\n<p><span>The paper highlighted that there is no knowledge of how proxy advice is formulated, provided, used, and disclosed because of the limited regulations over the industry. It further pointed out the methodologies also vary from company to company.<\/span><\/p>\n<p><span>The recommendations of the government include new licensing requirements for proxy advisers. It also wants proxy advisors to provide their research and voting recommendations to the company at least five days before supplying them to their clients.<\/span><\/p>\n<p><span>Additionally, the Aussie government wants feedback on potential changes to disclosure requirements for superannuation funds that use proxy advice services.<\/span><\/p>\n<p><span>\u201cThere is currently very limited regulation on how this proxy advice is formulated, provided, used, and disclosed,\u201d Treasurer Josh Frydenberg&#8217;s office said in a statement earlier this month.<\/span><\/p>\n<h2><span>Will It Curb the Industry?<\/span><\/h2>\n<p><span>The proxy advisory companies, however, are not happy with the government\u2019s step. ISS, one of the four Australian proxy advisors, said that the consultation seems to have started with a \u2018misguided notion.\u2019 The company also stressed that it maintains a high standard of transparency, quality, and independence when it comes to research and engagement with the companies.<\/span><\/p>\n<p><span>Louise Davidson, the CEO of the Australian Council of Superannuation Investors, said that, if implemented, the proposed changes would directly impact its business structure.<\/span><\/p>\n<p><span>\u201cOne part of the paper is clearly aimed at ACSI because we are the only proxy organization that is a membership organization and our members are super funds,\u201d Davidson said. \u201cIt is really unclear to us what part of the problem that part of the paper is setting out to solve.\u201d<\/span><\/p>\n<h2><span>Supporters<\/span><\/h2>\n<p><span>A part of the industry is still favoring the government recommendations. In its response to the consultation paper, ASE-listed iSignthis said \u201csome Proxy Advisors operate under a moral hazard in Australia navigating the various services they offer to their clients.\u201d The company is responding to the Aussie government\u2019s consultation call.<\/span><\/p>\n<p><span>\u201cClaims by proxy advisors that their reports are not &#8216;slavishly followed&#8217; ignores the reality that some fund managers are mandated by their clients to only follow proxy advisor recommendations,\u201d iSignthis stated. It also highlighted that fund managers split their votes according to which proxy advisor they are mandated to follow for specific clients.<\/span><\/p>\n<p><span>The closing date of the consultation paper is June 1 and it will be interesting to see if Australia follows the path of the United States and the United Kingdom to further regulate the proxy advisory industry.<\/span><\/p>\n<p>Source: <a href=\"https:\/\/www.financemagnates.com\/institutional-forex\/australias-move-to-regulate-proxy-advisory-keeps-the-industry-divided\/\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Australian government is considering tightening regulations<\/p>\n","protected":false},"author":3,"featured_media":126115,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - 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