Aiming to promote long-term value creation and “responsible” engagement of institutional investors with the investee companies, the SECP issues the Stewardship Guidelines for Institutional Investors.
The guidelines are applicable to the Asset Management Companies, Pension Fund Managers, Private Fund Management Companies, Life Insurers, and Employees Contributory Funds managed by the Investment Advisors with equity holding in listed companies.
Comprising of a set of best stewardship principles, the guidelines provide a comprehensive stewardship framework to steer institutional investors on the effective exercise of their stewardship responsibilities with due regard both to their investors and investee companies.
The Stewardship framework, adopted on a ‘comply or explain’ basis, emphasizes that institutional investors are responsible to their ultimate long-term investors and beneficiaries and that their policies on voting, monitoring, and engagement, conflict of interest, and sustainability consideration should be designed to protect the interests of these long-term clients and beneficiaries.
It further provides guidance on how to implement each principle and the outcome that is expected from applying the principle.
Securities and Exchange Commission of Pakistan
Securities and Exchange Commission of Pakistan contemplates conducting orientation sessions in collaboration with key stakeholders for raising awareness on Stewardship Principles within the institutional investors’ community and also a post regulatory impact analysis in future to assess implementation of Stewardship Guidelines.
The guidelines are available at Securities and Exchange Commission of Pakistan’s website.