Ttular principal pgina

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CORPORATE GOVERNANCE AND INSTITUTIONAL
INVESTORS Emilio Díaz Ruiz Titular professor of
Commercial Law International Seminar Corporate
Governance Issues 2008 U. Santiago de
Compostela, 8th May, 2008
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INSTITUTIONAL INVESTORS
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• Who they are
• Collective investment schemes
• Pension funds
• Insurance undertakings
• Others (e.g., holders of omnibus accounts)

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INSTITUTIONAL INVESTORS
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• Broader concepts
• Eligible investors and counterparties (art. 78
  LMV)
• Professional investors and counterparties (art.
  78 bis LMV)
• Qualified investors (art. 39, RD 1310/2005, on
  Public sale and suscription offerings)
• Institutional investors may be eligible,
  professional and qualified

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CORPORATE GOVERNANCE
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• In general
• Institutional investors
• The investments of Institutional investors

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SELF REGULATION OF INSTITUTIONAL INVESTORS
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• Not in Spain professional organisational level
  no of codes of conduct
• There exist some provisions incorporated to
  investment and pension funds regulations that
  can be characterised that way.

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SELF REGULATION OF INVESTED COMPANIES
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• Many codes of conduct at the company level, but
  primarily client oriented
• Not as many at the business organisational level

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SOFT LAW
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• Winter report (chapter III)
• Consolidated code of good governance (Annex I of
  the Conthe Report)
• Recommendation 9 (Annex II of the Conthe Report)

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LAW
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• Art. 46.1. a) of Law 35/2003 on collective
  investment schemes
• Art. 81.1. b) of RD 1309/2005 (Regulations of Law
  35/2003)

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LAW
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• Information in the annual report on the policy of
  vote when
• Spanish issuers are involved
• Over 1 of share capital
• Over 12 months or more holding the shares

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WHERE WE ARE
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• Large amount of investments by institutional
  investors
• No dominant or decisive stock holdings due to
  imperative diversification provisions (less
  stringent for hedge funds)
• Limited legal obligation no fiduciary duty as
  such, although several obligations to protect
  investors rights

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WHERE WE ARE
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• Regulators incentivizing for the institutional
  investors to take part in corporate life of
  invested companies
• Assessment by institutional investors as to
  whether invested companies follow a code of
  conduct

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TO DO
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• Incentivate the attendance and vote at the GSM,
  but not just in order to comply with formal
  obligations
• Soft law for institutional investors?
• Extend and expand fiduciary duties

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