Sebi seeks public comments on report on proxy advisers

MUMBAI: The Securities and Exchange Board of India (Sebi) is seeking public comments on a report submitted by the working group on issues related to proxy advisers (PA). Such comments were invited by August 18.

The working group, headed by Sandeep Parekh of Finsec Law Advisers recommends that no further mandatory regulation is required, except for amending the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The amendment would provide listed companies aggrieved by the view of a proxy advisor to approach SEBI for redressal of its grievance, the working group said in its report, adding that it may further provide a mechanism for the same.


The group also recommended that Sebi may consider drafting a code of conduct for proxy advisors which may include disclosure of conflict of interest and how it is managed.

The proxy advisor should take appropriate steps to manage, mitigate and/or disclose any potential conflicts of interest resulting from ancillary business activities, the report added.

There should be adequate disclosures regarding the business model. The entity/business unit providing services to investors/shareholders should be different from the one providing advisory services to a corporate client, the report said.

There should be a disclosure if consulting services are provided, and codes that determine when not to provide a voting recommendation should be clearly disclosed.

Board of proxy advisors should be independent of its shareholders, where such a position creates a serious conflict of interest, real or apparent, the report added.