An investment fund must include in its prospectus and/or AIF,31 as applicable, a summary of the policies and procedures that the fund follows when voting proxies relating to portfolio securities.32
Further, an investment fund is also required to promptly send the most recent copy of its proxy voting policies and procedures to any securityholder upon request.33
Disclosure of a fund’s proxy voting policies and procedures can provide clarity to investors about the ways in which proxy voting is used by ESG Objective Funds to achieve their ESG-related investment objectives, including the scope and limits of their use , and by ESG Strategy Funds as a principal investment strategy.
If an ESG Objective Fund or ESG Strategy Fund uses ESG-focused proxy voting as a principal investment strategy, the prospectus and/or AIF, as applicable, should include a summary of the ESG aspects of the fund’s proxy voting policies and procedures. This summary would provide clarity about how the voting rights attached to the fund’s portfolio securities will be used to further the ESG Objective Fund’s ESG-related investment objectives, or in the case of an ESG Strategy Fund, how the ESG-related proxy voting strategy is implemented.
General proxy voting or engagement approaches that address ESG matters: As discussed above under “Are ESG factors considered as part of the fund’s investment process?” , a fund that does not use ESG-focused proxy voting as a principal investment strategy but that is managed by an IFM that has general proxy voting policies and procedures that address ESG matters among other matters may, depending on the nature of the IFM ‘s investment process, be a Non-ESG Fund or ESG Limited Consideration Fund. If the fund is an ESG Limited Consideration Fund, the prospectus and/or AIF, as applicable, should not suggest that ESG-focused proxy voting is a principal investment strategy of t he fund, and where the summary of the fund’s proxy voting policies and procedures refers to ESG matters, it should be clear about the role that the consideration of ESG factors plays in the proxy voting approach.
Website availability of proxy voting policies and procedures: In order to provide investors with greater transparency, staff also encourage all investment funds to make the most recent copy of their proxy voting policies and procedures available on their designated websites.
31 A fund that has not obtained a receipt for a prospectus during the last 12 months preceding its financial year end must file an AIF in accordance with Part 9 of National Instrument 81-106 Investment Fund Continuous Disclosure (NI 81-106).
32 Item 30.1 of Form 41-101F2; Item 4.15(5) of Part A of Form 81-101F1; Item 12(7) of Form 81-101F2.
33 Subsection 10.4(3) of NI 81-106.