The Shareholder Rights Directive II (SRD II)
SRD II aims to promote effective stewardship and long-term investment decision making, in respect of shares traded on EEA regulated markets and comparable regulated markets outside the EEA. It came into effect on 10 June 2019. Under FCA COBS 2.2.B.5R, we are required to:
- develop and publicly disclose an engagement policy that meets the requirements of COBS 2.2B.6R; and
- publicly disclose on an annual basis how our engagement policy has been implemented in a way that meets the requirements of COBS 2.2B.7R; or
- publicly disclose why we have chosen not to comply.
The engagement policy must describe how a firm:
- integrates shareholder engagement in its investment strategy.
- monitors investee companies on relevant matters, including:
- financial and non-financial performance and risk
- Capital structure
- social and environmental impact and corporate governance
- conducts dialogues with investee companies.
- exercises voting rights and other rights attached to shares.
- cooperates with other shareholders.
- communicates with relevant stakeholders of the investee companies; and
- manages actual and potential conflicts of interests in relation to the firm’s engagement.
On an annual basis, the firm must disclose a general description of voting behaviour, an explanation of the most significant votes and reporting on the use of services of proxy advisors. The disclosure must include how votes have been cast unless they are insignificant due to the subject matter of the vote or to the size of the holding in the company.
Kyma Capital Limited believes firmly in the importance of effective stewardship and long-term decision making, involving transparency of engagement policies between institutional investors and the investee companies.
However, the firm has determined that, because of the nature of the investment strategy that it operates, it would not be in the best interest of its clients to adopt and disclose an engagement policy or disclose information on how it has exercised voting rights. Furthermore, Kyma Capital has not historically held equity positions in EEA listed companies above 3% on any investee companies issued share.