Amendment to the Enforcement Rules on Exercise over Collective investment Schemes

Transcription

1 [Korea Investment Management] Amendment to the Enforcement Rules on Exercise over Collective investment Schemes The English version of this policy is for information purposes only. In case of discrepancies between the Korean and the English text, the Korean text shall prevail. CHAPTER I GENERAL PROVISIONS Article 1 (Purpose) The purpose of these Enforcement Rules (these Rules ) is to set forth the terms and conditions for exercise of voting rights over the shares in collective investment schemes under Article 40(3) of the Internal Control Policy. Article 2 (Definition) Decision making shall mean determining whether or not to approve, oppose, remain neutral, or exercise voting rights over the proposals submitted to the general meeting of shareholders of the company issuing the shares pertaining to the collective investment schemes (the Shares ) (The issuing company shall be hereinafter referred to as the Company ). Provided, however, that giving notice of opposition to the Board of Directors resolution pursuant to Article 165-5(1) of the Financial Investment Services and Capital Markets Act (the Act ) shall not be deemed as decision making. Article 3 (Division-in-charge) The following divisions shall be in charge of decision making and exercise of voting rights: (i) Decision making: (a) domestic stocks: a division responsible for corporate analysis regarding domestic stocks (b) overseas stocks: a division responsible for management of overseas investment securities (ii) Exercise of voting rights: a division responsible for providing assistance for asset management Article 4 (Investor Protection) 1

2 Voting rights shall be exercised in accordance with the principle of good faith in order to protect investors of the collective investment vehicle. CHAPTER II DECISION-MAKING PROCESS Article 5 (Requirements for Decision Making) Voting rights shall be exercised in a manner that enhances economic value of collective investment schemes and protects the beneficiary s interest in consideration of the following factors: (i) Investor Protection (ii) Enhanced profitability of the Company thanks to improved operation (iii) Enhanced intrinsic value of the Company (iv) Improvement of corporate governance and financial structure of the Company Article 6 (Decision Making) (1) The head of the division-in-charge shall, in principle, exercise his/her voting rights in accordance with the Guidelines on Exercise of Voting Rights in the Appendix hereto; provided, that he/she may decide otherwise, if deemed necessary, with a statement on reasons for making such decision. (2) If several management divisions hold the Shares of the same Company, decision shall be made through discussions among the divisions. Article 7 (Decision Making of Each Collective Investment Vehicle) The head of the division-in-charge may issue different decisions for different collective investment vehicles, if he/she finds it difficult to issue a uniform decision due to a conflict of interest arising among the different collective investment vehicles. Article 8 (Committee on Exercise of Voting Rights) (1) Matters that may materially affect the collective investment schemes may be determined by the Committee on Exercise of Voting Rights (the Committee ). (2) The Committee shall consist of officers responsible for asset management, the Compliance Officer, the head of the Marketing Division, the head of the Compliance Office and the heads of respective divisions (i.e., head of the division responsible for decision making and head of the division responsible for exercise of voting rights). Provided, however, if a certain collective investment vehicle is deemed to be relevant, the head of the division managing the relevant collective investment vehicle shall be included. 2

3 (3) The Committee shall be chaired by the officer in charge of asset management, and the head of the division in charge of decision making or exercising voting rights shall serve as secretary. (4) The chairman may allow the manager of the relevant collective investment vehicle to appear before the Committee to state his/her opinion, if necessary. (5) The Committee s decision shall be approved by the attendance of two-thirds of the members and a majority of the members present. (6) The substance, proceedings and result of the Committee meeting shall be kept in minutes by the secretary. CHAPTER III EXERCISE OF VOTING RIGHTS Article 9 (Method of Exercise) (1) Voting rights shall be exercised either directly by the head of the division responsible for exercise of voting rights or through an order issued to the trustee (including a general business trustee, and hereinafter the same). (2) Notwithstanding the provision of paragraph (1) above, the head of the division handling exercise of voting rights may exercise the voting rights by way of a power of attorney delivered to the Company. In such a case, the power of attorney shall contain the decision issued by the head of the division in charge of decision making on the proposals. Article 10 (Exercise by Written Instrument) (1) Voting rights may be exercised through direct participation, in writing or by electronic means, in consideration of the weight of the proposal and procedural efficiency. (2) For exercise of voting rights by written instrument, a content-certified mail shall be delivered to the Company by post, or a certificate of receipt shall be received when such mail is delivered in person. Article 11 (Auditor Appointment Committee) Where an independent auditor is appointed by the Auditor Appointment Committee under Article 4 of the Act on External Audit of Stock Companies for the Company, the terms and conditions on exercise of voting rights as set forth herein shall apply mutatis mutandis in considering and approving the appointment. 3

4 Article 12 (Procedure for Exercising Voting Rights) (1) The head of the division responsible for exercise of voting rights shall remain cooperative with the trustee, so that the notice on convening of the general shareholders meeting may be delivered immediately upon the trustee s receipt thereof. (2) Immediately upon receiving the notice on convening of the general shareholders meeting from the trustee, the head of the division responsible for exercise of voting rights shall inform the head of the division responsible for decision making of the notice. (3) The head of the division responsible for decision making shall decide on the proposals (i.e., agenda) and deliver them to the head of the division responsible for exercise of voting rights following the Compliance Officer s review. (4) With regard to the matters determined by the head of the division responsible for decision making, the head of the division responsible for exercise of voting rights shall conduct business relating to the exercise of voting rights, in the case of an investment trust and an anonymous investment partnership, or issue an instruction on asset management (the Instruction ) specifying the determined matters to the general business trustee for exercise of voting rights, in the case of an investment company, a limited investment company, a joint venture company and an investment partnership. CHAPTER IV DISCLOSURE Article 13 (Corporations To Be Notified of Disclosure of Exercise of Voting Rights) The head of the division responsible for exercise of voting rights shall disclose details of exercise of voting rights to a corporation that has issued shares representing 5/100 of the aggregate asset value of the respective collective investment vehicle or amounting to not less than KRW1 billion. Article 14 (Disclosure) The head of the division responsible for exercise of voting rights shall disclose matters relating to the exercise of voting rights within five days from the date of the general shareholders meeting in accordance with Article 87(8) of the Act and Article 91(2) of the Enforcement Decree of the Act. 4

5 5 [English Translation]