Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021 (F2021L01801)

Schedule 1   Amendments

Corporations Regulations 2001

4   After regulation 7.6.03C

Insert:

7.6.03D Proxy advice obligations

Proxy advice relating to security of a body or interest in a managed investment scheme must also be provided to the body or the responsible entity for the scheme

(1) For the purposes of paragraph 912A(1)(j) of the Act, if a financial services licensee provides a financial service that is proxy advice relating to the exercise of:

(a) voting rights attaching to a security of a body; or

(b) voting rights attaching to an interest in a managed investment scheme;

the licensee must also provide the proxy advice to the body, or the responsible entity for the scheme, on the same day as the financial service is provided.

(2) The advice must be provided to the body, or the responsible entity, in writing in electronic form (regardless of how the financial service was provided).

Financial services licensee providing proxy advice must be independent of key entities

(3) For the purposes of paragraph 926B(1)(c) of the Act, Part 7.6 of the Act applies as if subsection 912A(1) of the Act were modified by inserting after paragraph 912A(1)(aa) the following paragraph:

"(ab) if any of the financial services is proxy advice relating to the exercise of voting rights attaching to a security or an interest in a managed investment scheme - be independent of the following entities:

(i) an entity that holds the security or interest and that is of a kind referred to in subparagraph 7.1.28AB(2)(b)(i), (ii) or (iii) of the Corporations Regulations 2001;

(ii) an entity that holds a beneficial interest in the security or interest and that is of a kind referred to in subparagraph 7.1.28AB(2)(b)(i), (ii) or (iii) of the Corporations Regulations 2001;

(iii) any other entity that makes decisions affecting the exercise of those voting rights; and".

(4) For the purposes of paragraph 926B(1)(c) of the Act, Part 7.6 of the Act applies as if subsection 912A(5A) of the Act were modified by omitting "(aa)," and substituting "(aa), (ab),".

Note: Subsection 912A(5A) of the Act is a civil penalty provision.