CSA Publishes Guidance for Proxy Advisory Firms


The Canadian Securities Administrators (“CSA”) on April 24, 2014 published proposed National Policy 25-201 Guidance for Proxy Advisory Firms (“NP 25-201”). The purpose of this Policy is to set out recommended practices for proxy advisory firms in relation to the services they provide to their clients and their activities. NP 25-201 provides guidance to proxy advisory firms designed to

(a) promote transparency in the processes leading to a vote recommendation and the development of proxy voting guidelines, and

(b) foster understanding among market participants about the activities of proxy advisory firms.

The guidance addresses conflicts of interest, the determination of vote recommendations, the development of proxy voting guidelines and communications with clients, market participants, the media and the public. The guidance in NP 25-201 is not intended to be prescriptive or exhaustive. In particular, there are extensive provisions on conflicts of interest which arise when, among other circumstances, a proxy advisory firm provides vote recommendations to an investor client on corporate governance matters of an issuer to which the proxy advisory firm provided consulting services.

The CSA states that it recognizes that proxy voting, which provides a means for investors and issuers to engage in dialogue about matters concerning the issuer, is integral in maintaining confidence in Canadian capital markets.

The CSA also acknowledges that proxy advisory firms play an important role in the proxy voting process by providing services that facilitate investor participation in the voting process such as analyzing proxy materials and providing vote recommendations. Some proxy advisory firms also provide other types of services to issuers, including consulting services on corporate governance matters.

The CSA is requesting comments on the proposed Policy. The comment period is open until June 23, 2014.

If you have questions about proxy solicitation services, contact any member of Clark Wilson’s Corporate Finance & Securities Group.