Proxy voting agency Manifest slams France’s AMF report

The proxy voting agency Manifest says it is “disappointed” at the outcome of a report from the French regulator, the AMF, into the conduct of General meetings at French listed companies.

London-based Manifest said the English language version of the February 7th report from the Autorité des Marchés Financiers deals with four broad themes between shareholders and issuers: shareholder voting at general meetings, the board of the general assembly, the role of the general assembly and voting on regulated items.

“Naturally, as a proxy voting agency we are particularly interested in the theme of shareholder voting at meetings, especially the experience of foreign shareholders at French meetings,” Manifest said in a statement.

“Disappointingly, though perhaps understandably, the paper makes little change to the paper that came out in May 2011 which was aimed squarely at the role of proxy advisors in the pre-meeting process.”

“It certainly seems clear that the AMF is not minded to review some critical anomalies on the topic. Ironically, despite insisting that they are looking to improve communications between shareholders, issuers and proxy providers, the AMF has so far failed to respond to Manifest’s letter of May 2011 which sought clarification on their regulations.”

The agency said the notion that proxy research should be vetted by the target company prior to publication “flies in the face of market conventions regarding research objectivity”.

“Brokers who make buying and selling recommendations work to strong market guidelines, which explicitly prohibit analysts from sharing their recommendations with issuers prior to publication.

Secondly, Manifest said the AMF runs the risk of making itself “the latest in a long line of regulators and quasi-regulators who have chased down the blind alley of assuming that every intermediary in the chain of intermediaries is essential to passing votes from pillar to post”.

“It is the very length and complexity of this chain that prevents it from working properly,” the agency charged. “With such a blind insistence that the chain is fit for purpose, in spite of evidence to the contrary, can investors really be blamed for believing it too?”

The AMF and French issuers continue to think that analysts misunderstand the significance of a provisional meeting announcement (avis de réunion), said Manifest.

“We can’t speak for others, but we well understand that many agendas “may” remain unchanged on the avis de convocation, but without a guarantee that reports won’t need to be re-written at the busiest time of year because of subsequent changes to the agenda, where is the incentive to undertake research early?”

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