PRI welcomes clarity on shareholder cooperation from ESMA

LONDON, 21 November 2013 – The Principles for Responsible Investment (PRI) today welcomed clarification from the European Securities and Markets Authority (ESMA) on ‘acting in concert’ rules governing investor cooperation across EU member states.

ESMA’s statement, published in response to a request by the European Commission for clarity on the issue, contains a “White List” of activities that shareholders can cooperate on without the presumption of acting in concert. The list includes entering into discussions with other investors about matters to be raised with a company’s board, and making representations to a company’s board about company policies, practices or actions the company might consider taking.

“In order to effectively advocate for better corporate governance, disclosure and management of ESG issues, much more collaboration between institutional investors is required,” said Helene Winch, Director of Policy and Research at the PRI. “Unfortunately, in a number of cases, acting in concert regulation acts as a barrier to investors entering into dialogue with one another and cooperating. The PRI encourages its signatories to actively exercise their ownership rights and ESMA’s statement removes uncertainty for those seeking to join forces to hold companies to account and ensure the boards and management of their investee companies are well run and properly governed.”

A full copy of the media release is available here.