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In a statement, the ICI said that the SECs proposal, which many support as a way to ensure that fund managers vote proxies in the best interest of shareholders, would overwhelm fund companies by requiring them to file reports twice each year "detailing hundreds of thousands of individual proxy votes, in some cases accompanied by lengthy explanations."
In addition, the ICI said that the rule would "needlessly politicize mutual fund portfolio management," because proxy voting information "is being sought mostly by special-interest groups." Such interest groups "want proxy votes disclosed to further their social and political agendas, regardless of how much it hurts mutual fund shareholders," the ICI continued. "Special-interest groups appear to view mutual funds as a prize to be captured as they single-mindedly pursue their narrow objectives."
The ICI also said that confidential proxy voting has long been a "fundamental shareholder right," and that doing away with such confidentiality would weaken corporate governance and accountability.
But the ICI endorsed several provisions within the proposal. It said that all fund companies should adopt proxy voting policies, especially in cases where funds face a conflict of interest. The group also said that such policies should be disclosed to the SEC and to shareholders. Lastly, it said that funds should maintain records of votes that can be examined by SEC investigators.
