Canada: Canadian Securities Administrators Adopt National Policy 25-201 Guidance For Proxy Advisory Firms

On April 30, 2015, the Canadian Securities Administrators (CSA) adopted National Policy 25-201 Guidance for Proxy Advisory Firms. The Policy may be viewed on the websites of CSA members, including the Alberta Securities Commission and the Ontario Securities Commission.

The purpose of the Policy is to address concerns of market participants about services provided by proxy advisory firms by providing non-mandatory guidance on recommended practices and disclosure for proxy advisory firms on conflicts of interest, transparency, development of proxy voting guidelines and communications with the public. The Policy intends to assist all firms that provide "proxy advisory services", which include any of the following: (i) analyzing the matters put to a vote at a shareholders' meeting; (ii) making vote recommendations; and (iii) developing proxy voting guidelines.


On June 21, 2012, the CSA published for comment Consultation Paper 25-401 Potential Regulation of Proxy Advisory Firms. The purpose of the Consultation Paper was to facilitate discussion about services provided by proxy advisory firms and to explore the need for the CSA to address concerns of market participants surrounding proxy advisory firms. Based on comments received on the Consultation Paper, on April 24, 2014, the CSA subsequently published for comment a proposed policy. After considering the comments received in respect of the proposed policy, the CSA adopted the Policy on April 30, 2015, with some non-material modifications from the policy initially proposed.

Key Provisions of the Policy

Conflicts of Interest

The potential for conflicts of interest in the proxy advisory industry may compromise the independence of advice provided by proxy advisory firms. The CSA expects firms to identify, manage and mitigate actual or potential conflicts of interest and to consider doing so by, among other things:

  • establishing and maintaining written policies and procedures to mitigate actual or potential conflicts of interest that could influence research, analysis, voting recommendations or proxy voting guidelines;
  • designing and implementing internal safeguards and controls to monitor policies and procedures and adopting a code of conduct to mitigate actual or potential conflicts of interest (which have the endorsement of the board of directors or, if the proxy advisory firm does not have a board of directors, the executive management team or a designated committee of the firm); and
  • regularly evaluating the effectiveness of processes to ensure they remain appropriate (including appointing an appropriately qualified person or committee of appropriately qualified persons for monitoring and assessing compliance by the firm of its processes).

In addition, proxy advisory firms are expected to disclose actual or potential conflicts of interest to their clients in a timely manner, and, where possible, to post or describe on their websites their policies, procedures, safeguards, controls and code of conduct.

Transparency and Accuracy of Vote Recommendations

The CSA promotes transparency in the processes leading to voting recommendations, so that market participants can appropriately evaluate the merits of such guidance. The CSA expects proxy advisory firms to ensure that voting recommendations are determined in a consistent manner, based on up-to-date publicly available information and prepared in accordance with a methodology aimed at reducing the risk of errors.

Proxy advisory firms may consider taking the following steps:

  • regularly evaluating the effectiveness of internal controls and procedures;
  • implementing a quality assurance process to review voting recommendations before they are provided to clients;
  • establishing and, where possible, disclosing policies and procedures describing the methodology used in the analysis as well as internal safeguards and controls to increase the accuracy and reliability of the information and data used in the preparation of voting recommendations;
  • ensuring that they have the resources, knowledge and expertise required to prepare well-researched and analyzed voting recommendations, by hiring, training and retaining individuals with the appropriate competencies; and
  • describing, where possible, the policies and controls applicable and the practices adopted with respect to hiring, training and retaining on their firm website.

Development of Proxy Voting Guidelines

Proxy advisory firms are encouraged by the CSA to ensure that their proxy voting guidelines, which may have influence on corporate governance practices of issuers, avoid a "one-size-fits-all" approach and to consider the following when developing such guidelines:

  • establishing, maintaining and applying written policies and procedures describing the process followed in developing and updating proxy voting guidelines;
  • consulting regularly with clients, other market participants and other stakeholders and taking into account local market or regulatory conditions;
  • having the resources, knowledge and expertise required to develop and update voting guidelines; and
  • posting, where possible, on their website their proxy voting guidelines, policies and procedures, and consultations leading to the development of proxy voting guidelines as well as the practices adopted with respect to hiring, training and retaining individuals.

Communications with Clients, Market Participants, Other Stakeholders, the Media and the Public

The CSA encourages proxy advisory firms to foster an understanding of the activities of such firms by:

  • communicating to their clients in their reports: (i) how the approach or methodologies were used or applied in determining the vote recommendations; (ii) sources of information used in determining the voting recommendations; (iii) the extent to which proxy voting guidelines are used when making voting recommendations; (iv) the nature of dialogue with the issuer, shareholder proponents or other stakeholders in the preparation of voting recommendations; (v) the limitations or conditions in the research and analysis used in the preparation of voting recommendations; and (vi) including a statement that the voting recommendations are intended solely as guidance to assist the client in their decision-making process;
  • correcting any factual error or inaccuracy found in a report in a timely manner;
  • establishing policies and procedures governing their communications with clients, market participants, other stakeholders, the media and the public and posting such policies and procedures on their websites; and
  • establishing a contact person to manage communications with clients, market participants, other stakeholders, the media and the public.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

William S. Osler
Matthew R. Olson
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.