EBA proposed regulatory technical standards on disclosure of investment policy by investment firms under the Investment Firms Regulation (IFR or Regulation 2019/2033). EBA also published the related disclosure templates and the associated instructions for investment firms. These disclosure requirements apply to class 2 investment firms with total assets above EUR 100 million. The comment period for the proposal ends on July 01, 2021.
The draft regulatory technical standards standards put forward comparable disclosures that should help stakeholders understand investment firms’ influence over the companies in which they have voting rights and the impact of investment firms’ policies on aspects such as the governance or management of these companies. The published templates and tables are for the disclosure of information on the investment firms' 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. They also include 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, the IFR specifies two materiality thresholds for the application of the investment policy disclosure requirement. First, it 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. 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 Investment Firms Regulation (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 ESMA, 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
- Consultation Paper (PDF)
- Disclosure Templates (XLSX)
- Instructions on Disclosures (PDF)
Comment Due Date: July 01, 2021
Keywords: Europe, EU, Securities, IFR, Reporting, Disclosures, Investment Firms, Regulatory Technical Standards, EBA
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