Vote Reporting: A consultation and discussion paper from the Vote Reporting Group

The Financial Conduct Authority, FCA, has published a new consultation of the Vote Reporting Group as regards the reporting of submitted votes and voting activities of asset managers on shareholder meetings. The purpose of the consultation is to develop a standardized reporting template which can be used by asset managers to communicate their voting activities to asset owners. Likewise, the reporting along a standardized form would enable asset owners (e.g. fund share holders) to compare voting behavior of different managers and firms, to assess asset managers‘ adherence to managers‘ own voting policies, and to benchmark asset managers‘ votings against asset owners‘ expectations.
In detail, the consultation outlines a proposed reporting template which would be made up of three key information sections:
1. Standard Fields which would include basic information such as the date of the meeting, the issuer, resolution identifier, if available, etc.
2. Voting Categories which would be used to categorize the votes in relation to their topics, indicate the entity / person submitting the proposed voting topic, indicate the opinion of the issuer as regards the vote on a particular topic, and indicate how the asset manager has voted.
3. Voting Rationale ´which would include information as to the rationale of an asset manager applied in a particular vote and as to whether or not the vote is in line with a manager’s own voting policy.
An overview of the template is presented in the following Table:

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The Vote Reporting Group proposes this template to be communicated to investors on a voluntary basis.
The template should further be owned by the „industry“. According to the consultation, the „ownership could consist of multiple firms and/or associations representing asset managers and asset owners with responsibility for developing and implementing the vote reporting template“.
The group also suggests that an independent oversight body be created to ensure the successful implementation of the template. This body would have various responsibilities, including the monitoring of any future changes to the template and the alignment of such changes with the template’s objectives and the contract’s terms and conditions. Additionally, the body would oversee the actions taken by the ownership entities / firms / associations to address any potential conflicts of interest – if they so occur. The body could be made up of „asset owners, asset managers, service providers, academic members, and independent members“, according to the consultation.
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The comment period on the proposed new template will end on September 21, 2023. The „Vote Reporting Group“ and the FCA thereby primarily seek feedback on the scope of the reportable data and on whether or not the template would support investors in their decision making process as to the appropriateness of their investments.