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Abstract: 

Registered investment advisers and registered investment companies hold, in the aggregate, a substantial amount of institutional proxy voting power on behalf of millions of investors and advisory clients. Investors and clients have traditionally delegated this proxy voting authority to advisers and investment funds, and deferred to their acumen in making voting decisions. Recently, however, investors and clients are seeking investment products and services that reflect more active expressions of voting preferences in corporate and social matters. Regulators have also taken note, with a renewed interest in the proxy voting practices of investment advisers and investment companies, both to enforce existing duties and to develop regulations that reflect evolving market practices. This article takes a fresh look at the current legal and regulatory framework for proxy voting by investment advisers and investment companies, highlights recent regulatory developments, and identifies topics investment advisers and investment companies should consider in implementing their proxy voting programs.

Keywords: ESG and Shifting Investor Preferences; Proxy Voting Responsibilities; Voting Structures for Funds; Regulatory Linking of ESG Fund Names and Proxy Voting Duties; Proxy Advisory Firms

Affiliations:  1: Morrison & Foerster, LLP; 2: Morrison & Foerster, LLP.