In its response to ESMA’s survey on its collection of evidence on short-term pressure from the financial sector on corporations, BETTER FINANCE expressed concerns about the institution restricting its definition of a long-term investment to just a long timeframe. The association argued that "not only the duration of a holding is decisive to decide if something is long-term or not." Among other factors it mentioned are the macroeconomic environment, market pressures, profitability, business objectives, client demand and executive remuneration structure.
BETTER FINANCE also took the opportunity to raise questions regarding the Shareholders Rights Directive II (SRD II). The organisation pointed to the absence of an EU definition of “shareholder” as being “extremely damaging” to long-term shareholder engagement. Besides, according to BETTER FINANCE, the obligations imposed on investment firms in SRD II are “not far-reaching enough to change their investment behaviour”.
The full article is available on Asset News.