SEC Proposed Rule:
Disclosure of Proxy Voting Policies and Proxy Voting Records by Registered Management Investment Companies
[Release Nos. 33-8131, 34-46518, IC-25739; File No. S7-36-02] File No. S7-36-02]
The following information using Type Letter F, or variation thereof, was submitted by
Subject: Proxy Voting Policies and Records
Dear Mr. Katz:
I am writing to express my support of the Securities and Exchange Commissions recently proposed rule regarding Disclosure of Proxy Voting Policies and Proxy Voting Records by Registered Management Investment Companies (File No. S7-36-02). I believe the proposed rule will encourage meaningful disclosure that will bolster investor confidence in the equity markets, which have been so severely challenged by the crisis of corporate governance over the past two years.
The proposed rule is a major step forward in providing greater transparency to investors like myself, whose proxy assets are held in mutual funds. I value the information on voting policies and votes cast, and I believe that the few mutual fund companies that do disclose both their votes and their proxy voting policies have demonstrated that such disclosure is both possible and of interest to investors. I want to be sure that other fund companies are also voting proxy assets in investors best interests, rather than in their own interests.
I have been deeply concerned by the plague of unfolding scandals this year, and have welcomed the chance to find out how my fund managers are using their own clout to demand more responsible practices and transparency at companies in my fund portfolio. The SECÆs proposed rule would not only help investors identify those funds that carefully examine proxy proposals before voting on them, but also highlight those funds that emphasize strong corporate governance and high standards of corporate responsibility. The rule would also provide for fund owners to be alerted when fund managers vote counter to established voting guidelines. Such disclosure would encourage mutual funds to take seriously their fiduciary duties to vote proxies in the best interests of shareholdersùwhich I applaud.
Over a dozen mutual funds and investment advisers already provide such disclosures through posting their votes or articulating detailed voting policies on their web sites. It is time such disclosure be made by every mutual fund whose fiduciary duties include the voting of proxies on behalf of their investors.
Careful and thoughtful proxy voting helps bring increased managerial accountability and social responsibility to many companies, and there is mounting academic evidence that progress on social, environmental, and corporate governance issues is linked to positive, long-term corporate performance. When all mutual funds reveal how they plan to handle the proxy voting process, and how they actually cast proxy votes, enabling shareholders to know what is being done in their name, we can expect corporate governance, accountability, and long-term financial performance to improve.