Retail investors will eventually benefit from the actions of institutional investors
Speaking at the FPSB Financial Congress event held in Mumbai, the SEBI chief urged AMCs to take an active role in voting in companies they invest in on behalf of their investors. “Institutional investors are now becoming active. The proxy advisory firms have come to have a say in the industry. In my judgment they are playing an important role. I would urge the asset management industry to get proactive in deciding what they are doing about company resolutions and the governance practices in the companies where they have invested. If institutional investors start taking a lead in this direction, I’m sure a large class of retail investors will benefit substantially from this,” he said.
SEBI had made it mandatory for AMCs to display their general policies and procedures for exercising the voting rights in respect of shares held by them on their websites and in their annual report from 2010 onwards.
AMC are supposed to disclose their voting patterns in matters related to corporate governance, merger and corporate restructuring, and anti-takeover provisions, changes to capital structure, social and corporate responsibility issues, appointment and removal of directors among other things.
