The Association of Investment Companies (AIC) has launched a campaign seeking to ensure that all investors can exercise their right to vote their shares.

The association has sent an open letter to Business and Trade Secretary, Jonathan Reynolds, calling for a change in company law so that nominees, including retail investor platforms, are required to offer information and voting rights to the beneficial holders of shares.

Its ‘My share, my vote’ campaign has launched with the aim of ending poor practices among some investment platforms and providers, such as failing to pass on voting rights and information, charging customers to vote, and declining to vote shares even when requested to do so.

The AIC stated that these practices had come to light following Saba Capital’s recent proposals to force change at seven investment trusts.

While it acknowledged that major platforms had acted quickly to keep their customers informed and help them vote, other platforms and providers had not, and, in some cases, customers had found themselves unable to vote or had been charged to vote.

The association felt that Part 9 of the Companies Act 2006 should be amended to: make it mandatory for the nominee to pass on company information and voting rights unless the customer opts out; ensure that where a customer does opt out, the nominee has a periodic requirement to confirm if this remained the customer’s preference; and allow any opted-out customer to opt in on demand.

“It’s simply unacceptable that investors find themselves left in the dark about their right to vote, prevented from voting or charged for the privilege,” stated AIC chief executive, Richard Stone.

“If we are serious about shareholder democracy, investors must be able to have their say.

“The large platforms have improved shareholder engagement significantly in recent years, and they have acted quickly in response to the Saba proposals. But we have to move beyond just relying on firms to do the right thing.

“We cannot have a situation where investors and their advisers are actively prevented from exercising their voting rights because the law allows their platform or service provider to choose not to pass on those rights.

“We are calling on the government to change the Companies Act so that nominees, including platforms, cannot avoid passing on voting rights and information to their customers.

“Now that investing takes place in a largely digital world, changing the law is essential for the health of our markets and to get more people engaged with their investments.”

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