The Australian Council of Superannuation Investors (ACSI) has welcomed the Senate’s blocking of reform to proxy advice for superannuation funds.
The Government’s plans to reform the sector was thwarted by independent Rex Patrick, with 29 votes to 25.
The changes would have required proxy advisers to be independent which would have significantly threated the operations of the ACSI as it was the main provider of proxy advice to its industry super fund members.
ACSI chief executive, Louise Davidson, said proxy advisers played an important role in facilitating informed shareholder voting at listed Australian company meetings on a range of financially material issues.
“The regulations were rushed through without parliamentary scrutiny and with no justification, rationale or harm identified,” said Davidson.
“Proxy advisers faced more onerous red tape and fines of up to $11 million for small administrative errors, and unprecedented rules regulating ownership of advisers.
“We are pleased to see the Senate voted to ensure the system that has been working well to deliver quality advice that supports investors and millions superannuation fund members is maintained.”
In December, Business Council chief executive, Jennifer Westacott, said proxy adviser reform would increase accountability and transparency.
“The integrity of this system of advice is important to every Australian,” she said.
“Just as businesses are required to disclose information to shareholders, proxy advisors need to be clear and upfront about how they come to decisions, whether they’ve checked their facts and about the implications of their advice.”
Earlier this week, Labor MP Stephen Jones called the Government’s attempt to pass the reform as “sneaky”.
“Proxy advisors are licensed and have been the subject of several inquiries which have found no case for regulatory change.
“Yet Mr Frydenberg and Mr Morrison have taken it upon themselves to bypass Parliament to introduce draconian new regulations without warning or justification.”