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Company Law Reform Bill [HL]

As I was saying, the Government share the principle that we perceive to underlie this amendment, that any disclosure regime must be practical and achieve reasonable levels of disclosure at proportionate cost. However, many institutional investors hold their clients’ investments through participation in collective investment schemes, rather than directly, and it is appropriate that the clients or members of the institution should have the same transparency of voting in both cases. The effect of the amendment would be to deny comparable levels of transparency to the clients and members of institutions investing in collective investment schemes. In many cases, it should be possible for the institutional investor to meet its obligation at relatively little cost simply by cross-referring to the collective investment schemes’ own disclosures. Moreover, in practical terms for other cases, an institutional investor should be able to ensure that it can disclose how a collective investment scheme in which it has an interest has voted, by inserting a term in its contract with the scheme, requiring such disclosure to be provided to it or made public. We would certainly agree with the noble Lord that the reach of any ““downstream disclosure””, if you will, that may be required must be sensible and needs to be balanced against issues of cost and effectiveness—and it will be. Therefore, I suggest to the noble Lord that it would be inappropriate to narrow the scope of the power at this stage by excluding this important class of disclosures. It is important that we allow for due consideration of all relevant elements when the Government are considering the final form of any disclosure regime—assuming, of course, that such a regime is, in the final event, required. If it is decided in due course to proceed to establish a statutory disclosure regime, there would, of course, be full consultation and a cost-benefit analysis to make sure that any final regime was proportionate and properly targeted. These are the arguments that we have just used in relation to the previous amendments. We think that this flexibility is necessary. I understand that the noble Lord feels that this would give too much scope to the Government, but I think that before one has had further discussions and consultations in the event that we decide to go down this route, it would be foolish to restrict this power so that it was not able to achieve its primary purpose. I therefore ask the noble Lord to withdraw this amendment.