Call to action

SIO calls for letter writing campaign urging regulators to open up mutual fund voting

The Social Investment Organization is calling on all interested investors to write to the Ontario Securities Commission urging securities regulators to require mutual funds to disclose how they vote on corporate issues.

The SIO is asking its members and the investing public to write to securities regulators asking them to draft regulations similar to rules recently approved by the US Securities and Exchange Commission requiring mutual funds to disclose their voting policies and the results of their votes on shareholder proposals of the companies in their portfolios.

 

“This issue is important because of the power that mutual funds hold on critical issues of governance, sustainability and social responsibility,” said SIO Executive Director Eugene Ellmen. “Mutual funds are among the largest investors in the stock market. Yet, at present, there is no obligation by mutual funds to tell their investors anything about how they vote on these important issues.”

 

On Jan. 23, 2003, the SEC voted to require all US mutual funds to publicly disclose their policies on voting the proxies they hold. As well, mutual funds will be required to disclose on their websites how they voted on shareholder proposals.

 

“We believe mutual funds have an obligation to vote their shares on behalf of their investors,” Ellmen said. “And investors have a right to know how mutual funds are voting their money.”

 

Canadian securities regulators have not addressed this issue in a substantial way. One proposal by the Canadian Securities Administrators (CSA) would require mutual funds to file brief annual reports on their voting activities. The proposal does not require mutual funds to disclose their voting policies, however, or the results of votes on individual shareholder proposals.

 

“With significant shareholder proposals in front of companies on global warming, human rights, corporate governance and other matters, investors need to know how their mutual fund holdings are being voted,” Ellmen said.

 

For a copy of a sample letter to send to the OSC, click here. For a copy of SIO’s letter to the OSC, click here.