June 10, 2021 | Editor: Martin Wennerström
SEC to halt implementation of proxy adviser rules
The U.S. SEC will not enforce the changes to its proxy advisory regulations that it adopted in July 2020. Moreover, it
will consider “further regulatory action” following a review of both these rules and related guidance documents issued
in 2019. The new regulations and guidelines, both adopted under the Trump administration, had been criticized for
allegedly weakening investors vis-à-vis management. The changes mandated enhanced disclosure of proxy voting
policies, the release of proxy reports to issuers ahead of publication, as well as proactive and transparent disclosure
of issuer feedback to institutional shareholder clients. While the amendments officially entered into force in November
2020, proxy advisers had had until year-end 2021 to comply. In response to the restrictions, proxy adviser Institutional
Shareholder Service (“ISS”) had filed a lawsuit against the SEC in October 2019. However, the SEC recently filed a
motion, reportedly supported by ISS, to suspend the litigation in light of the regulator’s new stance.
SEC (1) | SEC (2) | Lexology | Bloomberg Law | Reuters
Robinhood adds big names to board
Robinhood Markets Inc. announced the addition of three new independent directors to its board ahead of its imminent IPO. These include Amazon’s lead independent director Jon Rubinstein, who will also become Robinhood’s lead independent director. PwC partner Paula Loop will also join the board, helping the brokerage firm to comply with legislation requiring public companies headquartered in California to have women on board. The third nominee is former World Bank President Robert Zoellick.
Germany potentially to participate in Lufthansa issuance
Germany is considering participating in Deutsche Lufthansa’s planned EUR 3 billion capital increase, which is expected later this year. It plans to use the proceeds to pay a part off the EUR 5.5 billion “silent participation” that was included in the company’s EUR 9 billion bailout package. By participating in the capital increase, the German government would limit the dilution of its 20% stake. Germany is reportedly considering two options: either selling a part of its subscription rights and using the proceeds to buy new shares, or spending an additional EUR 1 billion by exercising its existing subscription rights.
Nord Gold plans IPOs in London and Moscow
Nord Gold Plc (“Nordgold”) is planning an IPO on the London Stock Exchange (“LSE”), while also applying for a secondary listing on the Moscow Exchange. The decision comes on the back of rising gold prices. Nordgold plans to have a free float of at least 25% of its issued share capital and expects to be eligible for inclusion in the FTSE UK indices. The company is reportedly valued at GBP 3.5 billion. Nordgold had delisted its global depositary receipts from the LSE in 2017, as its board had considered the company to be inappropriately valued at that time.
Governance in Brief – March 23, 2023
SVB Financial Group sued after the collapse of Silicon Valley bank unit SVB Financial Group, the parent company of Silicon Valley Bank, and two of its top executives, CEO Greg Becker and CFO Daniel Beck, are being sued by shareholders following the bank’s collapse. The lawsuit, filed by retail shareholder Chandra Vanipenta on behalf of a group of shareholders, accuses the bank and its two top executives of filing false and misleading financial reports.
Governance in Brief – March 16, 2023
Canada introduces climate reporting framework Canadian regulators have issued new guidance for the country's banks and insurance companies to better manage climate-related risks. The framework, which requires disclosure on governance, strategy, risk management, and metrics related to financial institutions’ greenhouse-gas emissions, was first drafted in 2022.
Governance in Brief – March 9, 2023
The U.S. Congress has passed a resolution repealing a Department of Labor (“DOL”) rule empowering retirement plan managers to consider climate change and ESG factors in their investment decisions. The rule, introduced by the Biden administration, falls under the Employee Retirement Income Security Act (“ERISA”), a federal law which sets protection standards for participants in private pension plans. Biden’s ruling entered into force in January this year, overturning prior Trump-era DOL rules that limited pension fund managers to restrict their investment strategies to “pecuniary factors.”
Governance in Brief – March 2, 2023
Indian regulator proposes enhancement to ESG disclosure rules India’s securities and market regulator SEBI has released a new ESG disclosure framework for public consultation. The proposed regulations impact India’s 1,000 largest companies by market capitalization, ESG funds and ESG ratings providers. For the largest companies, the regulator proposes areas of assurance of ESG disclosures and reporting and assurance of ESG footprint of the supply chain. The proposals expand on the 2021 Business Responsibility and Sustainability Report (“BRSR”) guidelines and propose mandatory assurance of certain KPIs under ESG disclosure. The KPIs contain intensity ratios such as GHG emissions, water consumption, and waste generation. For supply chain, SEBI will introduce a comply-or-explain approach for the top 250 companies starting in 2024, and assurance beginning in 2025. For ESG funds, SEBI proposes that at least 65% of AUM be invested in companies reporting on comprehensive BRSR and provide assurance on BRSR core disclosures. Under the proposed rules, ESG rating providers should also provide a “core ESG rating” based on assured information in addition to their own products.