Sebi makes voting on resolutions floated by invested firms a must for MFs

Starting April 2021, MFs will have to vote on key resolutions such as M&A, corporate revamp, and stock option plans

The Securities and Exchange Board of India (Sebi) has made it mandatory for domestic mutual funds (MFs) to vote on resolutions floated by companies where they have investments.

Starting April 2021, MFs will compulsorily have to vote on important resolutions. These include mergers, corporate restructuring, change in capital structure, stock option plans, appointment and removal of directors and corporate responsibility issues.

From April 2022 onwards, MFs will have to vote on all resolutions.
 

As per estimates, MFs currently abstain from voting on 10 per cent resolutions. A decade ago, they used to abstain from voting on 80-90 per cent resolutions.