The European Banking Authority (EBA) published the final draft regulatory technical standards on disclosure of investment policy by investment firms, under the Investment Firms Regulation (IFR). EBA also published the related disclosure templates and tables, along with the associated instructions for investment firms. The instructions on disclosure of investment policy provide legal references and guidance concerning specific positions for the disclosure templates and tables. These disclosure requirements apply to class 2 investment firms with total assets of more than EUR 100 million. The first disclosure date will be December 31, 2021.
The final draft technical standards put forward comparable disclosures that should help stakeholders understand investment firms’ influence over the companies in which they hold voting rights and the impact of investment firms’ policies on aspects such as the governance or management of those companies. The technical standards put forward templates and tables for disclosure of information on an investment firm’s voting behavior, explanation of the votes, and the ratio of approved proposal, with the objective to show if the investment firm is an active shareholder that generally uses its voting rights and how it uses them. The standards also cover information on the use of proxy advisory firms that should help address uncertainties about potential conflicts of interest. Finally, they include information on investment firms’ voting guidelines, including, when relevant, a breakdown by geographical zone, economic sector, or topic of the resolution being voted.
Only investment firms that do not meet the conditions for qualifying as small and non-interconnected investment firms set out in Article 12(1) of IFR (Class 2 investment firms) have to disclose information about their investment policy. Moreover, IFR specifies two materiality thresholds for the application of the investment policy disclosure requirement. The first one applies only to investment firms with on- and off-balance-sheet assets on average greater than EUR 100 million over the four-year period immediately preceding a given financial year. In the second, only companies whose shares are admitted to trading on a regulated market and in which the proportion of voting rights exceeds 5% of all voting rights issued by the company are considered relevant for disclosure. The IFR sets out, in Article 52, the requirement for investment firms to disclose information on investment policy, including the proportion of voting rights attached to shares held, voting behavior, use of proxy advisor firms, and voting guidelines. Article 52 also mandates EBA to develop, in consultation with the European Securities and Markets Authority, the draft regulatory technical standards to specify templates for investment policy disclosure of investment firms. This information will be published annually, along with the financial statements.
- Press Release
- Final Technical Standards (PDF)
- Disclosure Templates and Tables (XLSX)
- Instructions on Disclosures (PDF)
Keywords: Europe, EU, Banking, Securities, IFR, Reporting, Disclosures, Investment Firms, Regulatory Technical Standards, EBA
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