CP19/21: Proxy Advisors (Shareholders’ Rights) Regulation Implementation (DEPP and EG)

Open consultation: CP19/21
26/06/2019
26/06/2019
Consultation closes
26/07/2019
Policy statement
Autumn 2019

We are consulting on changes to the Decision Making and Penalties Manual (DEPP) and the Enforcement Guide (EG). Our proposals cover our new responsibilities over proxy advisors.

Read CP19/21 (PDF)

The revised Shareholders Rights Directive (SRD II) sets out to strengthen the position of shareholders and to ensure that decisions are made for the long-term stability of a company. It sets out new transparency obligations on proxy advisors.

The Proxy Advisor (Shareholder’s Rights) Regulations 2019 implement that part of SRD II which relates to proxy advisors. The Regulations aim to encourage greater transparency in the way in which they carry out their work and provide proxy advisor services. Under the Regulations, proxy advisors must:

  • disclose whether and how they apply a code of conduct
  • disclose information on their research capabilities and how they produce their advice and voting recommendations
  • identify and disclose any actual or potential conflicts of interests or business relationships that may influence the preparation of their research

We are designated as the competent authority over proxy advisors. We propose to apply our existing enforcement processes where we investigate and take action under the Regulations so that we broadly mirror our approach to conducting investigations and sanctioning under FSMA.

Who this applies to

This consultation paper will be of interest to anyone who may be subject to the Regulations or anyone who uses the services of proxy advisors. This will include (but is not limited to):

  • listed companies
  • their shareholders
  • their intermediaries

What you need to do

Please send us your comments by 26 July 2019.

Online response form

You can also:

  • email your responses to [email protected] or
  • write to: Law and Policy, Enforcement and Market Oversight, Financial Conduct Authority, 12 Endeavour Square, London, E20 1JN

Next steps

We intend to publish responses and our final rules in Autumn 2019.