Large mutual fund providers like Vanguard and Fidelity Investments will feel the brunt of new proxy disclosure guidelines, experts predict. New regulations requiring mutual fund companies to provide a complete account of proxy votes will definitely have an impact on how mutual funds are viewed, CBS MarketWatch.com reports.
The controversial new rule is the birth cry of a lengthy battle between mutual fund giants like Fidelity and regulators calling for increased transparency into the basic operations of managed assets. Mutual fund companies following the new rule are required to post their proxy trades to investors via the Internet or through paper mailings to investors requesting the information. Fund company proxy votes are also available in a filling dubbed N-PX found on the Security and Exchange Commission's Web site.
Mutual fund analysts are now waiting to see whether the proxy disclosure rule affects mutual fund voting patterns by politicizing the process. For example, experts anticipate backlash from labor unions if their pension fund managers vote on stocks promoted by investment banking subsidiaries.
Throughout the battles, mutual fund company leviathans like Vanguard have disavowed any hint of impropriety in the proxy voting process.
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