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SEBI asks MF houses to provide voting rationale

AMCs shall be required to make disclosure of votes cast on their website on a quarterly basis

March 25, 2014 11:32 IST | India Infoline News Service
Mutual fund houses will now have to give a reasoning while they cast their votes on resolutions by their investee companies.
“AMCs shall be required to record and disclose specific rationale supporting their voting decision (for, against or abstain) with respect to each vote proposal,” SEBI said in a circular on Monday.
AMCs shall additionally be required to publish summary of the votes cast across all its investee company and its break-up in terms of total number of votes cast in favor, against or abstained from, it added.
AMCs shall be required to make disclosure of votes cast on their website (in spreadsheet format) on a quarterly basis, within 10 working days from the end of the quarter. Further, AMCs shall continue disclosing voting details in their annual report.
Further, on an annual basis, AMCs shall be required to obtain Auditor's certification on the voting reports being disclosed by them. Such auditor's certification shall be submitted to trustees and also disclosed in the relevant portion of the Mutual Funds' annual report & website.
Board of AMCs and Trustees of Mutual Funds shall be required to review and ensure that AMCs have voted on important decisions that may affect the interest of investors and the rationale recorded for vote decision is prudent and adequate.
The confirmation to the same, along with any adverse comments made by auditors, shall have to be reported to SEBI in the half yearly trustee reports.

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