Sustainable Finance Newsletter - NYSE seeks to end closed-end fund meeting rule, opening divide with investors
By Ross Kerber
Aug 7 (Reuters) -Corporate annual meetings provideone of the great rituals of business reporting, a rare chance to watch executives and directors speak directly with investors.
But mutual fund shareholder meetings are much more obscure. Most top funds only stage them every few years such as when they need a bylaw tweak. Few investors bother to show up.
So initially I wasn't so excited when a colleague pointed out a rule change the New York Stock Exchange put forward to eliminate required annual meetings for closed-end funds. But the proposal generated pushback that revealed a lot of interesting context for these products. Read below what I found.
This week we're also trying a new format where most of the aforementioned fund coverage runs separately, and you'll find an abridged summary below. Click through to read the full column on Reuters.com
You'll also find links to stories about a scrapped Bill Ackmafund, poor showings for "anti-ESG" shareholder resolutions, and an Olympic gold medal ride by a former venture capitalist.
Let me know what you think of the new column format, and/or share news tips etc, by connecting with me on LinkedIn or emailing me at ross.kerber@thomsonreuters.com
NYSE seeks to end closed-end fund meeting rule, opening divide with investors
A New York Stock Exchange proposal to end required annual meetings for closed-end funds is drawing pushback from academics and investors who see it as a bid to prop up underperformers.
While the gatherings hardly ever gain as much attention as the annual meetings of public companies like Exxon or Goldman, the debate shows how seriously some shareholders take the events and their elections as a check on management.
But what could be seen as a routine and obscure rule change proposal has some critics up in arms. The proposal "represents a destruction ... of the very rights shareholders were told they had when they bought these funds," Saba Capital Management wrote in comment letter.
What do the concerns mean for the proposal and who else is speaking up? I rounded up the views of trade groups and economists to bring some context to the story. Click here to read my full column .
Company News
Speaking of closed-end funds, billionaire investor Bill Ackman last week scrapped the launch of one, Pershing Square USA, days before the fund was slated to begin trading, my colleague Svea Herbst-Bayliss reported.
Alphabet's GOOGL.O Google broke the law with an illegal monopoly on online search, a federal judge ruled, a big win for U.S. antitrust authorities challenging Big Tech's market dominance.
LVMH LVMH.PA fashion brand Dior was until last month behind on disclosures about working conditions in its supply chain, and made outdated statements on its website of a third-party certification, Reuters found.
On my radar
About a third of carbon credits failed to meet criteria meant as a benchmark for a voluntary market for the instruments, an independent governance body said.
A record 81 so-called 'anti-ESG' shareholder proposals went to a vote as of June 30, but average support fell to just 1.9% this year from 2.5% in 2023 and 3.5% in 2022, the Sustainable Investments Institute found. Many of the measures failed to get enough investor support to be re-submitted next year. Filers hope new proxy adviser policies will change the pattern.
Hurrah for Olympic cycling road race champion Kristen Faulkner, whose LinkedIn profile still lists a batch of deals she worked on as a venture capital investor.
NYSE dominates closed-end fund market https://reut.rs/3WCyA5v
Reporting by Ross Kerber in Boston; Editing by David Gregorio
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