Vote-renting is an investor practice that the Investment and Financial Services Association (IFSA) is firmly opposed to, according to the association’s chief executive Richard Gilbert.
The process involves an investor borrowing shares in order to vote on a transaction to secure a desired outcome.
IFSA is preparing an industry communication to confirm its position and detail best practice recommendations to minimise the risks of vote renting for members.
The industry body has also lodged a submission in response to the Australian Securities Exchange (ASX) consultation paper examining ways to improve the transparency of short selling.
IFSA supports the disclosure of all short sale positions directly to the market supervisor, the ASX, on a disaggregated and timely basis in order to promote market integrity, Gilbert said.
“In summary, IFSA is supportive of enhancing the transparency of short selling and securities lending practices where there is a ‘principles based’ regulatory response that promotes the integrity, efficiency and competitiveness of the Australian capital market,” he said.
Short-selling is a long-established investment activity that contributes to market liquidity and helps ensure market place efficiency, he added.
IFSA has recommended to the ASX that disclosure of company net short positions to the market should be made on an aggregated basis with a suitable delay; either weekly or fortnightly.
