Japan to introduce shareholder code to enhance returns- sources

TOKYO Wed Dec 25, 2013 8:17pm EST

TOKYO Dec 26 (Reuters) - Japan is preparing to unveil a set of recommendations for institutional investors designed to boost returns, transparency and corporate governance, sources familiar with the situation said on Thursday.

The voluntary guidelines call on investors to disclose how they vote at shareholder meetings and to engage more actively with companies to help raise medium- to long-term investment returns. Billed the 'Japanese Stewardship Code', the recommendations will be made public later on Thursday, sources said.

The recommendations apply to both non-Japanese and domestic institutions. The latter include life insurers and the GPIF national pension fund, which controls $1.2 trillion of assets, said the sources, who were not authorised to discuss the matter publicly.

The code was drawn up by a panel of experts set up as part of Prime Minister Shinzo Abe's drive to stoke economic growth, and was inspired by a similar set of guidelines introduced in Britain in 2010.

The U.K. Stewardship Code was conceived in the wake of the global financial crisis in 2008, when many institutional investors were criticised for not monitoring more closely the management of companies they owned.

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