The Association of Investment Companies has launched a campaign to ensure all investors can exercise their right to vote their shares.
The ‘My share, my vote’ campaign seeks to end poor practices among some investment platforms and providers, such as failing to pass on voting rights and information, charging customers to vote and declining to vote shares even when requested to do so.
In an open letter to MP Jonathan Reynolds, secretary of state for business and trade, the AIC said the practices have come to light following activist Saba Capital’s proposals to force radical change at seven investment trusts. Herald Investment Trust’s shareholders voted heavily against the proposed resolutions, however, a further six votes are still to come.
While major platforms have acted quickly to keep their customers informed and to help them vote, other platforms and providers have failed to and, in some cases, customers have found themselves unable to vote or have been charged to do so, the AIC said.
Richard Stone, chief executive of the Association of Investment Companies, said: “It’s simply unacceptable that investors find themselves left in the dark about their right to vote, prevented from voting or charged for the privilege. If we are serious about shareholder democracy, investors must be able to have their say.
“The large platforms have improved shareholder engagement significantly in recent years, and they have acted quickly in response to the Saba proposals. But we have to move beyond just relying on firms to do the right thing. We cannot have a situation where investors and their advisers are actively prevented from exercising their voting rights because the law allows their platform or service provider to choose not to pass on those rights.”
The AIC is calling on the Government to change the Companies Act so that it is mandatory for nominees, including platforms, to pass on company information and voting rights unless the customer opts out; ensure that where a customer does opt out the nominee has a periodic requirement to confirm if this remains the customer’s preference; and allow any opted-out customer to opt in on demand.
Stone added: “Now that investing takes place in a largely digital world, changing the law is essential for the health of our markets and to get more people engaged with their investments.”
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