Time for MFs to make their votes ‘count’ March 12, 2021 SEBI directs MFs to compulsorily vote in corporate resolutions To improve transparency and encourage mutual funds to diligently exercise their voting rights in the interests of unitholders, SEBI’s recent circular has mandated mutual fund houses to compulsorily vote on all resolutions involving approval. Until now, MFs were only required to record and disclose the rationale behind exercising their voting rights in companies, but were not required to compulsorily vote. However, MFs with no economic interest on the voting day may be exempted from compulsorily casting votes, SEBI said. From April 1, MFs have to compulsorily vote in all corporate governance matters: changes in the state of incorporation merger and other corporate restructuring and anti-takeover provisions; changes to capital structure, including increases and decreases of capital and preferred stock issuances; stock option plans and other management compensation issues; social and corporate responsibility issues; appointment and removal of directors; any other issue that may affect the interest of the shareholders, in general, and unitholders in particular.