Sebi panel moots new code for greater engagement of institutional investors
To push institutional investors into greater engagement in governance matters of listed firms, a high-level advisory body of regulator Sebi has suggested a new code on the lines of the Stewardship Code of the UK.
To push institutional investors into greater engagement in governance matters of listed firms, a high-level advisory body of regulator Sebi has suggested a new code on the lines of the Stewardship Code of the UK.
The UK Code, which has been in place since 2010, is aimed at enhancing "the quality of engagement between asset managers and companies to help improve long-term risk-adjusted returns to shareholders".
Taking cue from this, Sebi's International Advisory Board has suggested that there is a need for greater participation of institutional investors in the governance of the companies where they have invested.
While Sebi has already mandated mutual funds to disclose specific rationale supporting their voting decisions on proposals placed before shareholders by the listed companies, it has been felt that there is a need to further expand this requirement to other institutional investors as well.
Besides mutual funds, the major institutional investors in listed companies in India include foreign institutions, insurers, banks, hedge funds and corporate bodies.
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