[GA - defeated] Securities Issuers Governance And Disclosures

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Securities Issuers Governance And Disclosures
Category: Free Trade | Strength: Mild
Proposed by: Simone Republic | Onsite Topic​

The World Assembly (WA),

Noting previous efforts to safeguard international investments and free trade;

Seeing the need to protect securities investors through minimum levels of governance and disclosure standards;

Hereby defines:

  • "Director(s)" to mean members of the board of directors or similar bodies (such as boards of supervisors) in charge of the affairs of an issuer, and references to "boards" shall also include such similar bodies;
  • "Exchange(s)" to mean venue(s) for trading securities, and subject to:
    • due regulation by a competent regulator of, and operating within the jurisdiction of, a WA state; and
    • with securities listed on it open to investing by investors;
  • "Issuer(s)" to mean the issuer(s) of securities, which must be a legal person deemed as duly incorporated by the WA state where the exchange is;
  • "Investor(s)" mean those who purchase such securities, notwithstanding any accreditation requirements that may be imposed on such investors;
  • "Officer(s)" to mean the chief executive and other senior officers of the issuer, as designated by the board;
  • "Securities" to include all shares, bonds, notes, units, funds, partnership interests, and other similar instruments traded on an exchange and issued by an issuer;
  • "WA state" to mean an individual member state of the WA;

Hereby requires all WA states that permit the operation of an exchange to designate a competent regulator ("regulator") to regulate the following:

  1. Minimum levels of participation in the management of the issuerincluding:
    • the appointment and removal of directors, and qualification requirements, if any;
    • the appointment of director(s) unrelated to (i) individuals (and/or legal entities) that have a substantial interest in the securities of the issuer and/or (ii) officers of the issuer, in order to represent the interests of investors unrelated to the aforesaid individuals (and/or legal entities);
    • requirements on approvals by duly entitled investors in the securities that are independent of any transactions with actual and/or potential material conflict(s) of interest between the issuer(s) and other investors in the issuer;
    • requirements for an issuer to maintain regular, meaningful communications channels between investors and officers on matters affecting the issuer;
    • such other related matters as deemed appropriate by the regulator; and
    • any quorum requirements and the eligibility of investors in voting on sub-clauses (a) to (e) above;
  2. Minimum levels of disclosure on the governance of the issuerincluding:
    • all forms of remuneration paid to directors and officers, including a comparison with the compensation paid to the average employee of the issuer; and
    • the qualifications and work experience of directors and officers;
    • succession plans in case of the death and/or incapacity of the chief executive officer of the issuer (if such circumstances are applicable to that issuer);
    • any relations (regardless of nature, such as business, family, or other material relations), if any, between substantial investors, directors and officers of the issuer, and between the issuer and its directors and officers;
    • details on transactions in the securities of an issuer by the directors and officers;
    • the responsibilities of each director and officer, and any instances where responsibilities overlap;
    • availability, scope of coverage, costs and use of directors' and officers' liability insurance;
    • procedures with regards to internal audit, whistleblowing, risk management and internal control measures;
    • the issuer's policy with regards to diversity among the ranks of directors and officers in accordance with the demographics of the jurisdiction(s) relevant to the issuer;
    • substantial litigation affecting the issuer, regardless of whether the issuer is a plaintiff or a defendant;
    • details of any litigation filed by investors against the issuer for negligence or other similar matters;
    • such other related matters as deemed appropriate by the regulator;

Hereby clarifies that:

  • all communications between the issuer and investors, including (but not limited to) for participations in clause 1 and disclosures in clause 2, must be made through the customary communications and participation channels of the exchange, which must be available free of charge to investors;
  • the regulator is responsible for the implementation and interpretation of this resolution.
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Note: Only votes from TNP WA nations and NPA personnel will be counted. If you do not meet these requirements, please add (non-WA) or something of that effect to your vote.
Voting Instructions:
  • Vote For if you want the Delegate to vote For the resolution.
  • Vote Against if you want the Delegate to vote Against the resolution.
  • Vote Abstain if you want the Delegate to abstain from voting on this resolution.
  • Vote Present if you are personally abstaining from this vote.
Detailed opinions with your vote are appreciated and encouraged!

ForAgainstAbstainPresent
6605
 
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Overview
The resolution mandates a range of rights to participate for "securities issuers", a more technically correct way to define what is commonly understood as "publicly listed companies". There are broad requirements on board participation, voting in relation to connected transactions, investor relations channels, and forced disclosures on executive compensation, and other board level supervision and governance matters. The exact levels of details required are left to the individual states' regulator.

Recommendation
We concede the resolution is flawed in one aspect: the exact details are left to each member nation, and it is possible for nations to make these rules as loose as possible (as is the case in real life). This resolution relies heavily on Reasonable Nation Theory and in turn relies on member nations having sensible governments and competent regulators to manage these complex and technical issues at a local level. We believe this is a practical compromise within the confines of General Assembly resolutions and is a good start - but by no means the end - towards reining in corporate excess.

For the above reasons, the Ministry of World Assembly Affairs recommends a vote For the General Assembly Resolution at vote, "Securities Issuers Governance And Disclosures".
 
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Magecastle:
Against. I am not sure what this is supposed to do; member nations must regulate X but are given no instruction on how to do so?
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Yes I believe in RNT so they are required to make detailed rules on it and there's a long checklist of rules to make, but I assume they know. And For by the way.
 
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Magecastle:
If reasonable nations would already do this, what policy goal does this accomplish?
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It requires that they must have such requirements. It does not actually specify prescriptive details as there's no way I can do that in the space afforded here (typically this type of compliance manuals run to at least a couple of volumes and I guess somewhere around 2,000 pages).

By the same token, aren't a significant portion of WA resolutions something that a reasonable nation would do anyway?
 
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Simone_Republic:
It requires that they must have such requirements. It does not actually specify prescriptive details as there's no way I can do that in the space afforded here (typically this type of compliance manuals run to at least a couple of volumes and I guess somewhere around 2,000 pages).
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And what kind of requirements do you want? If member nations can just impose de minimis regulation on all mentioned areas, then this proposal does nothing.

By the same token, aren't a significant portion of WA resolutions something that a reasonable nation would do anyway?
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I do believe that this topic merits World Assembly law in general. I was rebutting your argument that under RNT reasonable member nations would impose the regulations this wants to create anyway.
 
Against. This resolution strengthens the system of capitalism because it promotes competition prevents market abuse, which leads to the stabilisation of capitalism. It shouldn't be stable. It should crumble.

(If I misunderstood the resolution please ping me on discord about it, I would love to learn more about resolutions and the WA in general! Thanks!)
 
As introduction:

This resolution defines minimum levels of good corporate governance for board and corporate level for securities issuers (usually public companies, but also includes listed investment funds, partnership interests etc).

This is not a direct replacement of GAR#401 as that actually regulates currency trading which is not what this resolution is about.

This is an important resolution that brings corporate boards under some level of control by WA.

I have deliberately taken a slightly Natsov approach here by allowing states to have some leeway in how to regulate it but I believe passing this is generally a good idea.
 
Sacred Butterfinger:
Against. This resolution strengthens the system of capitalism because it promotes competition prevents market abuse, which leads to the stabilisation of capitalism. It shouldn't be stable. It should crumble.

(If I misunderstood the resolution please ping me on discord about it, I would love to learn more about resolutions and the WA in general! Thanks!)
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I don't subscribe to this kind of accelerationism; it's flawed to believe that because capitalism becomes unstable, socialism is right around the corner. Other possibilities include predatory systems of exploitation and repression, such as fascism or warlord eras.
To make a RL comparison for a second, both USA and the Nordic countries are capitalistic countries, but the people worst off in the Nordic countries are far better off than many Americans above the poverty line. The Nordic capitalist class is far weaker than the American ditto, and holds far less control over the labour market and politics.
Is there more revolutionary energy in the US? Possibly, but much of that energy is on the right; it's a fascist reaction to unstable capitalism, partly engineered by a paranoid capitalist class so deeply afraid of any notion of reform that violent, reactionary upheaval seems like the better bet.

This resolution won't solve capitalist exploitation, of course. But it will lessen the amount of crises created by capitalism, which is an improvement, even if a very minor one.

For.
 
Seeing as there is currently a tie, I am voting For in this thread to break the tie for now and therefore I am casting my vote for in-game. If the tally in this thread changes during the voting period I will change my vote.
 
The General Assembly resolution "Securities Issuers Governance and Disclosures" was defeated 10,784 votes to 2,882.
 
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