Meritas Mutual Funds commends the CSA in its efforts to encourage mutual funds to disclose the results of their proxy votes.

“We have always believed that the proxy vote is a valuable asset and the CSA has concurred with our opinion. Mutual funds have been either using or virtually ignoring this client asset for years and it is time to come clean and tell investors what they have been doing with their proxy votes to help improve the companies in which they invest,” said Gary Hawton, CEO of Meritas, in a news release.

Under the proposed National Instrument NI 81-106, the CSA would require mutual funds to establish proxy voting guidelines and procedures and to disclose their votes to unitholders on request. The push towards increased disclosure and transparency follows a similar move by the Securities and Exchange Commission’s almost one year ago that required similar disclosure by mutual funds. In this ruling, the SEC is quoted as saying, “We believe that the time has come to increase the transparency of proxy voting by mutual funds. This increased transparency will enable fund shareholders to monitor their funds’ involvement in the governance activities of portfolio companies, which may have a dramatic impact on shareholder value,” said Hawton.

“We have always disclosed our votes ever since we launched Meritas Mutual Funds,” added Hawton. “We think that investors deserve to know how Meritas is using their money to influence the companies that we own on their behalf. The mutual fund industry needs to be less secretive and more forthcoming if we are going to win back some of the investor’s trust that has been lost in the past.”

Proxy voting can cover issues as diverse child labour, corporate governance, auditor appointment and the environmental impact of a company’s operations to name just a few.