A firm must either:
publicly disclose a clear and reasoned explanation of why it has chosen not to comply with any of the requirements imposed by (1).
[Note: article 3g(1) and (1)(a) of SRD]
integrates shareholder engagement in its investment strategy;
monitors investee companies on relevant matters, including:
financial and non-financial performance and risk;
capital structure; and
social and environmental impact and corporate governance;
conducts dialogues with investee companies;
exercises voting rights and other rights attached to shares;
cooperates with other shareholders;
communicates with relevant stakeholders of the investee companies; and
manages actual and potential conflicts of interests in relation to the firm’s engagement.
[Note: article 3g(1)(a) of SRD]
The annual disclosure must include a general description of voting behaviour, an explanation of the most significant votes and the use of the services of proxy advisors.
[Note: article 3g(1)(b) of SRD]
Where an SRD asset manager implements the engagement policy, including voting, on behalf of a firm, the firm must make a reference as to where such voting information has been published by the SRD asset manager.
[Note: article 3g(2) of SRD]
Where an SRD asset manager invests on behalf of a firm, whether on a discretionary client-by-client basis or through a collective investment undertaking, the firm must publicly disclose the following information regarding its arrangement with the SRD asset manager:
how the arrangement with the SRD asset manager incentivises the SRD asset manager to align its investment strategy and decisions with the profile and duration of the liabilities of the firm, in particular long-term liabilities;
how that arrangement incentivises the SRD asset manager to make investment decisions based on assessments of medium- to long-term financial and non-financial performance of the investee company, and to engage with investee companies in order to improve their performance in the medium- to long-term;
how the method and time horizon of the evaluation of the SRD asset manager’s performance and the remuneration for asset management services are in line with the profile and duration of the liabilities of the firm, in particular its long-term liabilities, taking into account its absolute long-term performance;
the duration of the arrangement with the SRD asset manager.
[Note: article 3h(2) of SRD]