SEC Proposed Rule:
Disclosure of Proxy Voting Policies and Proxy Voting Records by Registered Management Investment Companies
Proxy Voting by Investment Advisers
[Release Nos. 33-8131, 34-46518, IC-25739; File No. S7-36-02] File No. S7-36-02]
[Release No. IA-2059; File No. S7-38-02]
The following information using Type Letter E, or variation thereof, was submitted by
Subject: Proxy Voting
Re: File Numbers S7-36-02 and S7-38-02
Mr. Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street NW,
Washington, DC 20549-0609
Dear Secretary Katz:
I am writing in support of the Securities and Exchange Commission's recently
proposed rules regarding proxy voting disclosure by mutual funds and investment
advisers, File Numbers S7-36-02 and S7-38-02. As a mutual fund investor, I
congratulate the Commission for instituting meaningful disclosure that will
surely bolster confidence in the equity markets, and strongly support the
recommendations set forth in these proposed rules.
I also applaud the Commission for requiring that funds and advisers disclose
their actual votes, in addition to their guidelines and procedures. I disagree
with those who say that mutual fund investors do not want to review their funds'
voting records, and will not use this information to inform their investment
decisions. Voting guidelines provide valuable information, but voting records
will provide true accountability.
The rules are a major step forward in providing greater transparency to
investors whose proxy assets are held in mutual funds or entrusted to investment
advisers. The SEC is making a clear statement that proxy voting is a fiduciary
duty and should be exercised with the best interests of fund holders in mind.
Mutual funds and advisers have enormous potential to shape corporate
governance and social policies at portfolio companies. Yet since the 1970s, fund
participants and regulators have noted a tendency among mutual funds and
advisers to automatically vote with management, wondering whether this tendency
was influenced in part by a desire to win profitable 401(k) and other business
from companies where proxies are being cast. It is time these potential
conflicts of interest were addressed.
Public disclosure of proxy-voting policies and practices would pressure fund
managers and advisers to refrain from unilateral rubberstamping of management's
decisions, and would provide investors additional tools to distinguish among
funds in the market. Indeed, the proposed rules would not only help investors
identify those funds and advisers that carefully examine proxy proposals before
voting on them, but also those who emphasize strong corporate governance or high
standards of corporate social responsibility. The rules would also require fund
shareholders to be informed when fund managers vote counter to established
voting guidelines. The rules would pressure these fiduciaries to take their
voting duties more seriously, and would surely benefit investors.
These rules will provide me with an opportunity to identify mutual funds and
investment advisers who take their voting responsibilities seriously so that I
can ensure that my investments are helping to support greater corporate
accountability. Engaged proxy voting can help improve corporate governance and
encourage greater social and environmental responsibility. When all mutual funds
and investment advisers reveal how they cast proxy votes, enabling shareholders
to know what is being done in their name, we can expect corporate governance and
accountability to greatly improve.
Thank you for this opportunity to comment on the proposed rules, and for
taking these important steps toward restoring investor confidence in the