Report Calls For Greater UK Fund Disclosures

July 27, 2001 ( - A report, stating that fund managers should be required to disclose to their clients how they voted in resolutions on companies, has generated a much debate among the players in the financial services industry.

The recommendations contained in a government report, written by a former UK Competition Commissioner, will form the basis a draft bill that the government will publish for public comment. This forms part of the Company Law Review project, which aims to update many antiquated UK business laws.

The report recommends that disclosure be obligatory and the UK’s Trade and Industry Secretary should be able to require institutions to make those decisions public if there was insufficient transparency

While many groups, including the National Association of Pension Funds support the recommendation, the proposals do have their opponents.

Critics argue that imposing this type of regulation on the estimated 10,000 resolutions voted on each year would create unnecessary red tape. They believe that fund managers should only have to disclose the information on request.

They further argue that simple voting details do not provide an accurate reflection of discussions and understandings between the fund manager and the company, and could be misinterpreted.

Trade Secretary Patricia Hewitt said she hoped to pass legislation on company law within the current parliament, which is due to last until 2006 at the latest.

– Camilla Klein