On May 24, 2017, the Securities Commission published an update to the Guidelines on Unit Trust funds allowing asset managers operating unit trusts to now vote on director appointments without seeking support from their unitholders. This issue came onto ACGA's radar in December 2016, when a member alerted us to problems in voting on director resolutions at Malaysian AGMs. We raised this with the Securities Commission (SC) at the time and it confirmed the requirement in paragraph 8.43 of the Guidelines, which stated: "the fund manager or the trustee may not exercise the voting rights at any election for the appointment of a director of a corporation whose shares are so held, unless it is sanctioned by the unitholders of the fund by way of an ordinary resolution." (underlining added)

The SC later acknowledged that the requirement to obtain consent from unitholders represented an insurmountable barrier for asset managers in exercising their vote, and that such a rule would limit the ability of institutional investors to adopt stewardship practices. Aside from deleting the paragraph on voting for directors, the updated guidelines streamline other requirements for asset managers and align with the Companies Act 2016.