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Firms Join to Urge Mexico to Change Governance Practices They Say Harm Investors

Top asset management firms, including Aberdeen and Franklin Templeton, are supporting an effort to require Mexican corporations to give at least one month’s notice of shareholder meetings and remove bylaws that the companies say limit the rights of minority investors, according to a Financial Times report.  Cartica, an asset management firm focused on emerging markets and a significant shareholder in two Mexican mid-cap companies, is leading the effort which also includes institutional investors CalPERS and CalSTRS. Cartica has formally requested both the Mexican Banking and Securities Commission and the Mexican Stock Exchange to require all public issuers in Mexico: (1) to extend the period for advance notice of shareholders meetings to at least 30 days, from the current 15-day minimum; and (2) to rescind charter provisions that require board approval for a shareholder to acquire 10% of the voting shares and exercise its statutory right to nominate a director to the board. According to a Cartica press release, the firm presented evidence to Mexican regulators that showed during the 2016 proxy season approximately 75 Mexican listed companies, including many of the country’s largest firms, failed to provide notice and particulars of their annual general meetings in time for shareholders to make informed voting decisions.