Rules on Exercise of Voting Rights over Collective investment schemes

Transcription

1 [Korea Investment Value Asset Management] Rules on Exercise of Voting Rights over Collective investment schemes The English version of this policy is for information purposes only. In case of discrepancies between the Korean and the English text, the Korean text shall prevail. CHAPTER I GENERAL PROVISIONS Article 1 (Purpose) The purpose of these Rules (these Rules ) is to set forth the terms and conditions about the criteria, methods and procedures relating to exercise of voting rights by the Company in accordance with Article 87 of the Financial Investment Services and Capital Markets Act (the Act ) and Articles 89 through 91 of the Enforcement Decree of the Act (the Enforcement Decree ). Article 2 (Fiduciary Duty) The Company shall exercise its voting rights in the interest of the investors of collective investment schemes in accordance with the principle of good faith. CHAPTER II EXERCISE CRITERIA Article 3 (Exercise/Non-Exercise of Voting Rights) (1) The Company may determine at its discretion whether or not to exercise voting rights or approve/oppose a proposal over the shares in the collective investment schemes, except in the case of Articles 5 and 6 hereof. (2) Notwithstanding the provision of paragraph (1) above, the Company shall actively exercise its voting rights over certain matters that have a material impact on the collective investment schemes, such as merger, business transfer, appointment/dismissal of officers, amendment to the articles of incorporation of the company that has issued the shares held in the collective investment schemes (the Shares ). Article 4 (Objective of Exercising Voting Rights) Voting rights shall be exercised in a manner that enhances economic value of collective investment schemes and protects the beneficiary s interest in consideration of the 1

2 following factors: (i) Investor Protection (ii) Enhanced profitability of the Company thanks to improved operation (iii) Enhanced intrinsic value of the Company (iv) Improvement of corporate governance and financial structure of the Company Article 5 (Shadow Voting) (1) The Company shall conduct shadow voting in any of the following cases, except where the collective investment schemes are evidently expected to suffer losses due to a merger, business transfer, appointment/dismissal of officers and amendment to the articles of incorporation of the company that has issued the Shares and other similar matters: (i) Where a person falling under any of the following sub-items intends to include the company that has the shares pertaining to his/her collective investment schemes as his/her affiliate: (a) The Company, a specially related person to the Company and the joint shareholder under Article 141(2) of the Enforcement Decree of the Act; (b) A person having de-facto control over the Company that falls under any of the following: i. An affiliated investment trader or investment broker and its affiliates; ii. A major shareholder of the Company (including the shareholder who is specially related to the largest shareholder) (ii) Where the company that has issued the Shares has any of the following relationships: (a) An affiliate of the Company; (b) A person having de-factor control over the Company that falls under any of the following: i. An affiliated investment trader or broker and its affiliates ii. A major shareholder of the Company (including the shareholder who is specially related to the largest shareholder) (iii) Where investor protection or appropriate management of the collective investment schemes may be undermined as prescribed in the Presidential 2

3 Decree. (2) The proviso to paragraph (1) above shall not apply to a corporate group regarded as an entity restricted from cross shareholding. Provided, however, where the corporate group holds shares issued by a stock-listed corporation, which is an affiliate of the collective investment business entity, through the collective investment schemes, and its shadow voting on such matters as merger, business transfer, appointment/dismissal of officers and amendment to articles of incorporation of the stock-listed corporation is evidently likely to inflict losses upon the collective investment schemes, the corporate group may exercise its voting rights. In such a case, the corporate group may exercise its voting rights to the extent not exceeding 15% of the total number of issued and outstanding shares of the stock-listed corporation, including the number of shares over which a specially related person to the corporation is entitled to vote. Article 6 (Prohibition of Exercise of Voting Rights) The Company shall not exercise its voting rights over the shares acquired in excess of the investment limit prescribed in Articles 81(1) and 84(4) of the Act. Article 7 (Prohibition of Cross Voting and Avoidance) The Company shall not engage in any act aimed to avoid the obligation to independently cast votes or the obligation not to exercise voting rights, by way of cross voting under an agreement with a third party. CHAPTER III EXERCISE METHOD Article 8 (How to Exercise Voting Rights) The Company shall exercise voting rights on its own or through the Instruction issued to the trustee, and may allow the company issuing the Shares to exercise voting rights by means of a power of attorney, if deemed necessary. In such a case, the power of attorney shall contain approval/opposition of the agenda. Article 9 (Issuance of an Invitation) The Company may issue an invitation for the purpose of satisfying the quorum at the request of the company issuing the Shares. 3

4 Article 10 (Exercise in Writing) The Company shall exercise voting rights in writing or by electronic means in accordance with the articles of incorporation of the company issuing the Shares. Article 11 (Split Vote) The Company may split its vote, if it is found difficult to issue a uniform decision due to a conflict of interest among the respective collective investment schemes. CHAPTER IV EXERCISE PROCEDURE Article 12 (Preparation for the General Meeting of Shareholders) (1) The Company shall have a full understanding of the date, time, venue and agenda of the general meeting of shareholders of the company that has issued the Shares prior to the meeting. (2) The Company shall remain cooperative with the trustee, so that the notice on convening of the general shareholders meeting may be delivered immediately upon the trustee s receipt thereof. Article 13 (Decision Making) (1) Important matters relating to the exercise of voting rights, i.e., whether or not to exercise voting rights, the agenda over which voting rights are to be exercised and how to exercise voting rights, shall be determined by the officer in charge of asset management based on the opinion of the analyst of the relevant asset (stock). (2) The officer in charge of asset management, the head of the Equity Management Division or the analyst of the relevant asset (stock) may, if deemed necessary, request that the company that has issued the Shares provide additional documents regarding the agenda for purposes other than notified or announced. Article 14 (Opinion Gathering and Document Submission) The officer in charge of asset management, the head of the Equity Management Division or the equity manager for the relevant collective investment schemes may, if deemed necessary, refer to the opinion of, or request submission of relevant documents from, the managers of other collective investment schemes, independent experts or other affiliates. 4

5 Article 15 (Exercise Procedure) Voting rights shall be exercised in accordance with the procedure set forth in Appendix 1 attached hereto. CHAPTER V DISCLOSURE Article 16 (Corporation To Be Notified of Exercise of Voting Rights) The corporation that has issued shares representing 5/100 of the aggregate asset value of the respective collective investment vehicle or amounting to not less than KRW10 billion shall be notified of the details relating to exercise of voting rights. Article 17 (Disclosure) The Company shall disclose details relating to the exercise of voting rights, on its own or through a general business trustee, in accordance with Article 87 of the Act and Article 91 of the Enforcement Decree of the Act. Article 18 (Record Keeping) (1) The Company shall keep a record of Details of Exercise of Voting Rights (in Appendix), which shall be managed by the Business Administration Office. Exercise of voting rights shall be notified to the Compliance Officer. (2) The Company shall state exercise/non-exercise of voting rights over the company to be notified of disclosure and the agenda over which the Company s voting rights have been exercised (or the reasons for non-exercise of voting rights) in the business report pursuant to Article 90 of the Act. (3) The Company may summarize key terms and conditions of these Rules in the investment prospectus. Article 19 (Internal Control) The Compliance Officer shall examine the Company s compliance with the applicable laws and regulations and these Rules, in exercising its voting rights. 5

6 Appendix 1 Exercise of Voting Rights Timing Procedure Remarks From time to time Understand the schedule of the general shareholders meeting Review the agenda of the general shareholders meeting (Stock Trading) Approval by the CIO after the Vice President s review 1 day before the general shareholders meting Within 5 days after the general shareholders meting Resolve agenda submitted to the general shareholders meeting (Stock Trading) (Compliance Officer) Send the power of attorney for exercise of voting rights Disclose exercise of voting rights Delivery to the relevant corporations Quarterly Issue instructions for the collective investment schemes over which voting rights have been exercised State the criteria for exercise of voting rights Business Report 6

7 7 [English Translation]