I - Considering that several questions have been put to CMVM regarding the attribution of voting rights attached to shares representing the share capital of public companies, members of Pension Funds, the Executive Board of the CMVM (Comissão do Mercado de Valores Mobiliário) in accordance with Article 370/2 of the Portuguese Securities Code and the Portuguese Insurance Institute (Instituto de Seguros de Portugal) being heard, hereby issues the following general statement of opinion:
1 - The issue of whether the voting rights attached to shares that integrate the pension fund portfolios should be attributed to the linked company/ies does not merit a single answer, depending on the characteristics of the pension plans financed by the fund, the proper fund and, ultimately, by its management.
2 - The decisive criteria to determine the attribution of voting rights, in this case, is the independence of the pension fund management in relation to the linked company/ies.
3 - In determining the attribution of voting rights it is worth considering not only the contractual documents with respect to the establishment and management of the fund, but also the practice followed, for gauging the independence of the pension fund management as to the linked company/ies.
4 – The attribution of voting rights is placed with keener discernment with regard to the closed-end pension funds that finance defined benefit pension plan, on account of a presumption of fact that, in these cases, the independence of management as to the linked company/ies is minor.
5 - This statement of opinion should be taken into account, as from today, in future disclosure of information on the attribution of voting rights.
II. The current statement of opinion is based on the following grounds:
1 - The issue of whether the voting rights attached to shares that integrate the pension fund portfolios should be attributed to the linked company/ies does not merit a single answer, depending on the characteristics of the pension plans financed by the fund, the proper fund and, ultimately, by its management.
Pursuant to the Securities Code, the purpose of the attribution of voting rights is for possible influence liaison in the exercise of voting rights, pertinent to the shares representing the share capital of public companies, to become transparent. Given the need for discernable implementation of legal criteria for attribution, taking note of the underlying objectives, its application to pension funds compels one to make distinctions based on the type of fund considered and the terms and conditions by which it runs its management relative to the linked company/ies.
2 - The decisive criteria to determine the attribution of voting rights, in this case, is the independence of the pension fund management in relation to the linked company/ies.
Inter alia, Article 20 of the Securities Code compels the attribution of voting rights to the participant the voting rights attached to shares held by third parties but on behalf of the participant, and the voting rights attached to shares administered by the participant if same holds discretionary powers for the exercise. The same legal provision compels an accumulative implementation of the criteria, when applicable (Article 20/1/g)). The combined implementation of these precepts presents proven importance in the case of pension funds. In the case of a management company that acts, not only in the interest of the participants and beneficiaries, but also the linked company, the voting rights attached to shares that incorporate the pension funds assets should be attributed to linked company/ies if the pension fund management does not show independence regarding same. This independence is shown by the global weighting of multiple criteria, confirmed in the present case, namely: exposure of the linked company to the benefits and risks of the pension funds; the degree of autonomy in determining the investment policy; policy independence in exercising the voting right; the autonomous exercise of participating powers in the general meeting representing the fund; and the organisational autonomy in the structure of the decision-making of the fund.
3 - In determining the attribution of voting rights it is worth considering not only the contractual documents with respect to the establishment and management of the fund, but also the practice followed, for gauging the independence of the pension fund management as to the linked company/ies.
The criteria for the attribution of voting rights compels the determination of all the facts pertinent to the assessment of the degree of independence of the pension fund management as regards the linked company/ies, which involves, not only the contractual instruments concerning the fund, but also the experience shown in the decisions taken by same.
4 – The attribution of voting rights is placed with keener discernment with regard to the closed-end pension funds that finance defined benefit pension plan, on account of a presumption of fact that, in these cases, the independence of management as to the linked company/ies is minor.
In differentiating the types of pension funds whose voting rights may with a larger probability lead to an attribution of voting rights is salient in the closed-end pension funds that finance defined benefit pension plan, due to the fact, that in these cases, the linked company/ies bears the risk resulting from fluctuations in the fund's assets.
5 - This statement of opinion should be taken into account, as from today, in future disclosure of information on the attribution of voting rights.
The Executive Board of the CMVM
Lisbon, 25 May 2006