The CNMV approves the Code of good practice for investors

Following a public consultation (please see eventid=16269), which generated great interest and was taken into account to determine the final scope of modifications, the Spanish National Securities Market Commission (CNMV) has released the final Code of good practice for institutional investors, asset managers and proxy advisors in relation to their duties regarding the assets conferred or the services provided (Code of good practice for investors).
The aim of the Code is to promote greater engagement of shareholders in the life of the companies in which they invest, as their engagement is essential to achieve and efficient corporate management and governance models. The Code is aimed at institutional investors and asset managers, based in Spain, and for the purposes of this Code, institutional investors are deemed to be life insurance and reinsurance companies and occupational pension funds. Adherence to the Code is voluntary, but entities must indicate in their annual report how they applied the different principles of the Code the previous year, in accordance with the concept of proportionality. The Code adopts the “apply and explain“ model, and a transitional period of three years has been established for entities to transitionally apply the „comply or explain“ principle.
Once the Code has been approved, investors wishing to comply with it must submit a document to the CNMV; the CNMW will then publish a list of all companies that have subscribed to the Code and their voting policy on the CNMV website.
A succession of components are contained that allow entities of lower size, scale, or complexity to adhere. This establishes a disciplined strategy to investing in investee firms and their vulnerability to sustainability concerns.
The Code contains 7 Principles, including the need to invest and have a long-term strategy, the importance of monitoring, the development and publicity of the engagement policy, the exercise of voting rights, the annual transparency of engagement and voting actions, the management of conflicts of interests, and the remuneration policy.