The Canadian Securities Administrators (CSA) say that they intend to provide regulatory guidance to proxy advisory firms early next year.
The CSA published a notice that provides an update to a consultation it initiated last year, contemplating the possible regulation of the firms, which provide advice to institutional investors on various proxy issues, from corporate governance matters to proposed takeover deals.
Today it said that, after reviewing the comments it received on that consultation, that it has concluded that a response from the CSA is warranted, and that it believes a “policy-based approach” that would give firms guidance on best practices and disclosure is the right way to go.
The CSA says that its guidance will improve transparency in the proxy advisory industry. “We are in the process of developing our proposed approach, which we intend to publish for comment in the first quarter of 2014,” it says.
In its initial consultation paper the CSA indicated that its concerns about the proxy advisory business include: potential conflicts of interest, a perceived lack of transparency, potential inaccuracies and limited dialogue between proxy firms and issuers, corporate governance issues, and the unknown extent to which investors rely on proxy firms to guide their votes.