ICI Praises Ongoing European Efforts Concerning Shareholder Voting Rights, July 2007

Washington, DC, July 27, 2007 - ICI supports European Commission guidance that supplements a recently adopted directive serving to improve and strengthen shareholders' rights and the ability of shareholders to vote cross-border.

Background
In May 2003, the EC released Modernising Company Law and Enhancing Corporate Governance in the European Union - A Plan to Move Forward, which suggested the need to enhance shareholders' rights in listed companies and address problems relating to cross-border voting. In April 2004, the European Parliament expressed its support for the Commission's intention to strengthen shareholders' rights, in particular through the extension of the rules on transparency, proxy voting rights, the possibility of participating in general meetings via electronic means and ensuring that cross-border voting rights can be exercised.

Language of Meeting Documents. ICI supports the Commission's proposal to recommend that companies make available in a language customary in the sphere of international finance, in addition to the national language, the convocation, meeting agenda, and other documents submitted at the general meeting. The Institute noted that such efforts are increasingly important as shares of public companies become more widely held across national boundaries.
Depositary Receipts. ICI strongly supports a recommendation that depositary agreements provide that the depositary may not vote shares without instructions from the depositary receipt holder unless the receipt holder has given the depositary the discretion to vote the shares without the holder's instructions.
Stock Lending. ICI continues to strongly support Commission initiatives to address stock lending at the EU level, believing such measures strengthen and improve the efficient operation of a single market in the EU. The Institute does not, however, support a recommendation that borrowed shares may not be voted except upon instructions from the lender, saying such an approach is not consistent with market practice and may adversely complicate securities lending arrangements for both lenders and borrowers. ICI believes parties should have the ability to negotiate the exercise of voting rights.
Intermediaries and Management Companies. The Institute also "vigorously support[s]" initiatives to improve and protect the ability of beneficial owners to exercise voting rights when the owner holds shares through a chain of intermediaries.
Split Votes and Management Companies. ICI also strongly urges the EC to adopt a recommendation that its member states ensure management companies may cast votes attaching to some shares differently from votes attaching to other shares so that management companies can serve institutional investors and investment funds.