Proxy firms play by new rulebook as Sebi tightens procedural guidelines

Firms that advise investors on how to vote on shareholder resolutions floated by listed companies will now be regulated more closely after the Securities and Exchange Board of India's (Sebi's) issuance of so-called procedural guidelines.

The new framework is aimed at increasing accountability, addressing conflict of interest, and establishing greater communication between proxy advisors and their clients and the company. More importantly, Sebi has allowed India Inc to present its counterview and has also put in place a grievance redressal mechanism.

Proxy advisors are firms that give voting recommendations on resolutions floated by companies to their clients, who are typically