SIFMA AMG Urges SEC to Avoid Mandating a Single Fund-Voting Approach

SIFMA AMG urged the SEC Investor Advisory Committee to preserve flexibility for asset managers and not mandate any single approach as to how mutual funds and ETFs vote their shares.

At an IAC meeting, Lindsey Keljo, head of the asset management group, recommended the SEC let asset managers offer a range of voting approaches, subject to their fiduciary duties, rather than impose one method. She stated that alternatives such as mirror voting and pass-through voting each carry tradeoffs. She pushed back on claims that large index managers wield coordinated influence over corporate America.

She said the concentration of share ownership among a few large asset managers was a byproduct of investor choice and that the underlying assets belong to fund investors, not managers. She said voting outcomes remained decentralized, with stewardship teams often disagreeing with one another and with proxy advisory firms, and increasingly offering investors voting-choice programs.

On the alternatives, Ms. Keljo said mirror voting (when a fund votes in proportion to other shareholders) did not eliminate influence but reallocated it, substituting the judgment of other shareholders and proxy advisors for that of the fiduciary chosen by fund investors, and could amplify activists and insiders.