SCBAM places a priority on fund management business regulation and supervision and operates in line with relevant rules and regulations, such as the Securities and Exchange Act B.E. 2535, announcements by the Securities and Exchange Commission Office, regulations established by the Association of Investment Management Companies, working rules on investment management businesses, and codes of conduct on investment management businesses. The company believes its strict compliance with these rules and regulations will ensure the efficiency and high standard of its business management.
All SCBAM employees are committed to strictly complying with the regulations on performance in the investment management business as follows:
Employees shall abide by laws governing securities and exchange, related legal announcements, regulations, corporate working rules, and codes of conduct.
The company shall manage the investment of all its funds under the program approved by the Securities and Exchange Commission Office and contracts made with its clients.
Employees shall oversee investment by the company, staff, and company-managed funds of various types to prevent potential conflicts of interest.
Employees shall perform duties honestly and impartially to ensure that fund management proceeds in accordance with fund objective and to the benefit of clients. The interests of customers shall come before those of the company, directors, or staff.
Employees shall disclose information regarding potential conflicts of interest arising from performance in an accurate, complete, and clear manner.
Employees shall keep confidential any information provided by customers and maintain the interest of the customers. Such behavior shall not violate the law.
Employees shall abide by the professional code of ethics established by the Association of Investment Management Companies.
The code of business conduct features principled ethics embraced by the company to run the investment management business, namely, mutual fund, private fund, provident fund, and other kinds of related business permitted by the Securities and Exchange Commission Office, and guidelines such as compliance with rules and regulations established by associations or clubs of which the company is a member. Included are:
Conducting business honestly and following moral principle with clients or the public and when contacting other financial institutions.
Managing investment by taking into account proper investment, objectives, acceptable risks, environments, and client constraints.
Complying with the Securities and Exchange Act, laws and regulations, requirements, and other relevant rules, and refraining from committing, assisting in, or supporting any action contrary to any laws, regulations, requirements or other rules concerned as well as moral principles.
Adhering to and abiding by the code of conduct and professional ethics for investment management established by the Association of Investment Management Companies or clubs of which the company is a member.
Refraining from committing any action that encourages a conflict of interest, personal exploitation, or taking unfair advantage over clients or the company.
Giving clients fair, equal, and unbiased treatment.
Keeping client information confidential and maintaining the interests of customers as a top priority.
Disclosing information to customers whether directly or indirectly to their advantage or disadvantage.
Presenting data on fund performance results clearly, accurately, and completely.
Reporting to the association, state agencies concerned, or regulatory agencies when finding any action that breaks the law, threatens economic stability, or undermines the country's economic stability.
Fund managers will make proxy votes that upholds the unitholders’ best interests, and conduct their decision with transparency in accordance to company guidelines and relevant rules and regulations issued by the Securities and Exchange Commission.
Stance and votes by fund managers on various issues, are as follows:
Approving financial statements, operating results, dividends
Against approval if the auditor (1) refrains from issuing Disclaimer Opinion (2) considers the financial statements are incorrect or issue an Adverse Opinion (3) express negative reservations that is of significance
Against approval if dividend payment does not comply with dividend payment policy without proper justification
Acquisition or disposal of an important asset, acquisition or leasing out the business, mergers and acquisitions, entering management contracts, and takeovers.
Against approval in the absence of information disclosure showing details of the acquisition or disposal of the asset, acquisition or leasing out the business, mergers and acquisitions, forming management contracts, and takeovers, where information disclosed should include details such as purpose of transaction, background information, price of transaction, etc.
Against approval if decision is dependent on financial adviser’s guidance but there is failure to disclose details of their opinion or the financial adviser issued an unfavorable opinion.
Appointment or removal of Board of Directors and Audit Committee members
Against approval when there is no disclosure of key information to accompany the nomination such as information regarding directorship at other companies.
Against approval of Directors who attended fewer than 75% of meetings without sufficient explanation within meeting invitation documents. Also, the fund manager may contact the company to request additional information regarding the director's absence from the meeting to support an informed voting decision. A vote 'in favor' will be cast if the reason is deemed valid, while a vote 'against' will be cast if the reason is considered unjustified.
Against approval of candidates for a Board of Director position if that individual is concurrently a Board of Director at more than 5 companies (only companies listed on the Stock Exchange of Thailand).
Change of financial structure such as capital increase or capital write-downs
Against approval of capital increases which offers existing shareholders (Rights Issue) shares greater than a 2:1 ratio (new share: old share) without justified reasoning.
Against approval of capital increases without a rights issue to existing shareholders, whereby the capital increases produce more than a 20% control dilution – except for companies subject to government bail-out or a merger than resembles a share swap transaction.
Against approval in cases where voting rights are diminished, such as grouping shareholders into several tiers or any action which causes unequal voting rights or unequally treatment between shareholders.
Against approval of share buybacks resulting in the Free Float receding below 20%.
Approve approval of capital increases without clearly identified the purpose or use of proceed. The approve voting required justified scheme and price. For warrant issuance, the information regarding key features of securities, potential impact of dilution, exercise schedules, and in case of warrant embedded with call option the exercise term should not be subjected to the discretion of Directors and management.
For approval of having shareholders participating regarding allocation of shares that were not fully subscribed.
Special renumeration given to the Board of Directors, sale of securities to the Board of Directors or employees of the company.
Against approval of special renumeration in cases where amount is not disclosed.
Against approval of shares allocation under ESOP (Employee Stock Option) programs where dilution information is not disclosed.
Against approval of shares allocation under ESOP (Employee Stock Option) programs where dilution exceeds 10%.
Against approval of the schemes that offer ESOP annually, whereby an ESOP each year causes a dilution exceeding 2% of outstanding shares (approval on a case by case basis).
Against approval where the Exercise Price of the ESOP (Employee Stock Option) shares are more than 20% below market price (at time when the ESOP program is seeking endorsement).
Against approval of provisions whereby the Exercise Price or period of the ESOP (Employee Stock Option) program can be modified subsequent to the Option having been issued, unless the change in terms arises from normal circumstances such as due to capital increases, etc.
Limitations to directors’ liabilities
Against approval of proposal by the company to reduce or limit Directors’ liabilities for losses which may arise from failure to effectively perform his/her duties.
For Approval of an increase in compensation for damages/liabilities to the Director, if proven to have performed duties to his/her full ability.
Against approval of transactions and activities which may create a conflict of interest among the company and/or shareholders and/or related parties of shareholders or the related-party transactions and activities.
Against approval of transactions and activities which may create a conflict of interest among the company and/or shareholders and/or related parties of shareholders or the related-party transactions and activities, in the absence of a review by a financial adviser.
Change in the company’s business line or company’s mission
Against approval if no clear explanation is made regarding reasons for the change in the company’s business line or company’s mission.
Amendments to Company Articles
Against approval if no clear explanation is made regarding reasons for amending the Company Articles.
Against approval if the portion of the Company Articles to be changed is not specified and if the wording of the new amendment is not disclosed beforehand.
Appointment / termination of financial auditor and approval of audit fees
Against approval in situations where there is no disclosure of audit fee and other fees such as non-audit fees.
Against approval in cases where the auditor is associated with the company or is connected to the company in a significant way.
Against approval of auditors who have not been endorsed by the Stock Exchange of Thailand.
The company should not employ the same auditor for over 7 years and there should be at least 5 years lapse.
Change of auditor requires notification of reason for change.
While considering the voting decision as described above, the fund manager may pre-declare the voting decision to the company’s management or its Investor Relations to allow the company to provide additional clarification to support the voting proposal. After examining the justification and suitability, whether the voting proposal upholds the best interest of the unitholders or not causes harm to the fund, the fund manager will subsequently propose the agenda for approval from the investment committees in which the voting decision could be differ from the guidelines described in Items 1.1 to 1.9. In subsequently, voting decision will be archived and reported to Board of Director in annual basis.
In the case of overseas investments, recommendations from the investment advisor and external proxy voting services are considered as part of the voting decision. If the fund manager wishes to vote differently from the provided recommendations, they must submit the agenda for approval by the investment committee.
In other cases, where the resolution is not covered by the aforementioned scenarios, the fund manager must assess the pros and cons of the matter, with primary consideration given to the best interests of the unitholders
Exercise of Voting Rights
The fund manager may exercise the voting rights personally or delegate the task to an investment officer to act in accordance with the fund manager’s instructions. A proxy may also be granted to an investment officer, the fund’s trustee, a company executive, a representative of the Thai Investors Association, an independent director of the company, a person serving in such a role, or another representative (such as a proxy voting service provider, either domestic or international) deemed appropriate by the fund manager. The proxy must act in accordance with the resolution or instructions specified by the fund manager.
Review of Voting Activities
After the fund manager has exercised the voting rights, the Compliance Unit shall audit the results of the Fund Manager’s proxy votes.
Retention of Voting Documentation and Resolution Outcomes
The Trade Execution Department shall maintain copies of documents showing exercise of proxy votes and decisions taken by fund managers, to be kept for a period of at least 5 years before documents can be discarded.
Prevention of Conflict of Interests
If the issue being voted creates a conflict of interests with the investment management company, or individuals connected to the company (connected person is defined by SEC’s Or.Nor. 1/2548 or subsequent regulations that may be issued in the future), the fund manager must base the voting decision on the unitholders’ best interests and must vote strictly in accordance to stated guidelines.
Information Disclosure
SCBAM shall disclose the proxy voting policy by via a notice which is displayed at the office premises or on SCBAM’s website.
ESG Voting
ESG-related Voting Guideline
As a fiduciary duty, SCBAM regularly exercises voting rights at shareholder meetings. In alignment with our fiduciary duties, we seek to safeguard the best interests of investors, while considering the potential ESG-related impacts on businesses. SCBAM shall vote to support resolutions that generate the best value for shareholders, based on the following criteria:
We vote FOR agenda items that we are confident do not conflict with our Sustainable Investment Policy and considered appropriate given the company's business operations and past commitments,
We vote ABSTAIN on agenda items that may conflict with our Sustainable Investment Policy but where the company has cooperated to disclose sufficient information and/or make changes in response to our engagement, and
We vote AGAINST agenda items that we believe may conflict with our Sustainable Investment Policy and where the company has cooperated to disclose sufficient information and/or make changes in response to our engagement.
Incorporation of External proxy voting research services
In certain circumstances, SCBAM may seek proxy research services from reliable external sources for comparison with and reference to international practices. In such cases, we reserve the right to vote based on our judgment, ensuring that external agency voting criteria align with our ESG stewardship policy and that recommendations from external sources are reasonable and in the best interests of investors according to their investment conditions and restrictions.
Exercise Voting on Securities Lending
When engaging in securities lending, SCBAM will recall the securities at every shareholder meeting (XR) to consider exercising voting rights as per SCBAM’s proxy voting policy..
Exercise Voting on Material ESG Failures
In cases where SCBAM finds that an investee company may have operations or behaviors in conflict with ESG factors as follows:
The investee company experiences concern over corporate governance or auditing.
The investee company does not cooperate with SCBAM on ESG stewardship activities.
The investee company experiences concern conflicts of interest that could adversely affect its shareholders.
The investee company is unable to adequately manage the risks or address impacts from environmental or social factors.
The investee company engages in activities that may significantly affect ESG factors, such as the acquisition and disposal of significant assets, the buying, selling, or leasing of businesses, mergers or consolidations, management hiring, and business takeovers, while disclosure remains inadequate.
SCBAM will seek approval from the Sustainability Investment Committee to promote sustainability transition by exercising its voting rights at meetings on various relevant agendas, such as:
Agenda for appointing the company's directors and audit committee either individually or as a whole
Agenda for considering the management remuneration
Agenda for considering the payment of special compensation to the company's directors, and for securities offering to the company's directors and employees
Agenda for considering the restructuring of capital, such as increasing/decreasing capital and increasing/decreasing the authorized amount for bond issuance.
Agenda for considering the acquisition or disposal of significant assets, the buying, selling, or leasing of businesses, mergers or consolidations, management hiring, and business takeovers
