Distance Voting: Amec warns institutional investors

On March 24, the Association of Capital Market Investors – Amec – published a Notice to the Market to encourage institutional investors to participate in Shareholders Meetings through the distance voting system, a possibility created by the Brazilian Securities and Exchange Commission – CVM – by means of the Instruction 561. But while interacting with its members, the association has noticed some difficulties as to the use of the new proxy card.
“At first, it seemed that most of the problems were related to the custodians and the asset management firms. However, it has become clear that the custodians seem to be prepared to receive the proxy cards, at least in physical terms, what can bring about problems in fund manager’s backoffice areas,” explained Mauro Rodrigues da Cunha, Amec CEO.
In an attempt to identify the problem and help market participants, the association concluded that most custody agents have already established the procedures – yet rudimentary in some cases – to enable the exercise of the new distance voting right. However, not all decision makers have been having access to the necessary information, what can lead to the misuse of the tool.
In the Notice to the Market, Amec requests that its members and remaining investors take the step of demanding the distance voting in the “2017 Season of Shareholders Meetings,” the initial enforcement stage of the new regulation, so that routines are created and eventual problems are solved until next year’s shareholders meetings’ season.
Click here to access the Notice to the Market: CVM Instruction 561.