Proxy Voting

RiverFront Investment Group Proxy Voting Policy

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Issue

Investment advisers who exercise voting authority with respect to client securities must adopt and implement written policies and procedures, reasonably designed to ensure that the adviser votes proxies in the best interest of its clients.  The procedures must address material conflicts that may arise in connection with proxy voting.  The Rule further requires the adviser to provide a concise summary of the adviser’s proxy voting process and offer to provide copies of the complete proxy voting policy and procedures to clients upon request.  Finally, the Rule requires that the adviser disclose to clients how they may obtain information on how the adviser voted their proxies.   

RiverFront votes proxies for the majority of its clients, and therefore has adopted and implemented this Proxy Voting Policy and Procedures. 

Policy

It is the policy of RiverFront to vote proxies in the interest of maximizing value for RiverFront’s clients.  Proxies are an asset of a client, which should be treated with the same care, diligence, and loyalty as any asset belonging to a client.  To that end, RiverFront will vote or withhold a decision to vote in a way that it believes, consistent with its fiduciary duty, will cause the value of the issue to increase the most or decline the least. 

If a client wishes to use any general or specific proxy voting guidelines, these should be discussed with the client’s Sponsor Firm and the Sponsor Firm may determine whether or not to allow these exceptions and how they will be implemented. Clients may wish to have their proxies voted by an independent third party or other named fiduciary or agent, at the client’s cost, this type of request should also be discussed with the client’s Sponsor firm. RiverFront will rely on information from the Sponsor Firm to process any exceptions to the guidelines and/or policy. 

Procedures for Voting Proxies

RiverFront assumes voting responsibility for all client accounts unless explicitly noted otherwise in the client’s Advisory Agreement.  RiverFront will generally cast votes for all shares for which it has voting authority. 

In light of RiverFront’s fiduciary duties, and given the complexity of the issues that may be raised in connection with proxy votes, RiverFront has retained Broadridge (“Broadridge”) Financial Solutions to assist in the coordination and voting of client proxies. Broadridge specializes in providing a variety of fiduciary-level proxy-related services to investment managers.  The services provided to RiverFront include timely delivery of meeting and record date information; proxy analysis through an electronic web-based vote execution platform; and detailed recordkeeping needs of RiverFront’s proxy voting function. 

For RiverFront clients that have invested in the portfolios through the Janney Montgomery Scott platform, Mediant Communications Inc. (“Mediant”), not Broadridge, will assist in the coordination and voting of client proxies. Janney Montogomery Scott requires that RiverFront use Mediant, instead of Broadridge.

Broadridge and Mediant will vote client proxies according to Glass, Lewis & Co.’s (Glass Lewis) recommendations (described below). Glass Lewis is a leading provider of governance services that support engagement among institutional investors and corporations through its research, proxy vote management and technology platforms.

RiverFront shall maintain a list of all clients for which it votes proxies.  The list will be maintained electronically and updated by the CCO’s designee who will obtain proxy voting information from client agreements. 

The following guidelines are to be followed when possible:

  • Broadridge/Mediant to monitor and keep track of all proxy votes
  • Broadridge/Mediant to vote pursuant to the guidelines suggested by Glass Lewis.

In certain limited circumstances, a proxy may be received from sources other than Broadridge/Mediant.  In such circumstances, RiverFront will forward the proxy to Broadridge/Mediant.   

Resolving Potential Conflicts of Interest

We recognize that conflicts of interest may arise for a variety of reasons, and the Investment Team will reasonably try to assess any material conflicts between RiverFront’s interests and those of its clients with respect to proxy voting. If the Investment Team detects a conflict of interest, Broadridge/Mediant will use pre-determined guidelines and their research, and make an objective voting decision. 

Recordkeeping

RiverFront will maintain the documentation described in the following section for a period of not less than five (5) years, the first two (2) years at its principal place of business.  The CCO will be responsible for the following procedures and for ensuring that the required documentation is retained.

Client request to review proxy votes

  • Clients are informed that they should direct proxy voting information requests to RiverFront. 
  • Any request, whether written (including email) or oral, received by any Employee of RiverFront, must be promptly forwarded to the CCO, or designee, for processing.  All written requests must be retained in a permanent file.
  • In order to facilitate the management of the proxy voting record-keeping process, and to facilitate the dissemination of such proxy voting records to clients, RiverFront may distribute to any client requesting proxy voting information the completeproxy voting record for that client for the period requested. 
  • RiverFront will furnish the information requested, free of charge, to the client within a reasonable time period (within 10 business days).  RiverFront will maintain a copy of the written record provided in response to client’s written (including email) or oral request.
  • Clients are permitted to request the proxy voting record for the five-year period prior to
    their request.  

Investment Manager Policy (provided by Glass Lewis)

Glass Lewis guidelines are designed to maximize returns for investment advisors by voting in a manner that limits financial risks to investors to the greatest extent possible.  The guidelines are designed to increase investor’s potential financial gain through the use of the shareholder vote.  The guidelines will ensure that all issues brought to shareholders are analyzed in light of the fiduciary responsibilities unique to investment advisors and investment companies on behalf of individual investor clients including mutual fund shareholders.   The guidelines will encourage the maximization of return for such clients through identifying and avoiding financial, audit and corporate governance risks. 

Glass Lewis updates its Investment Manager Policy on an annual basis. These guidelines are maintained by RiverFront and incorporated into this manual by reference.

RiverFront reviews the Glass Lewis guidelines on an annual basis to ensure they are consistent with client’s best interest. Additionally, RiverFront will review Glass Lewis’s policies and procedures regarding potential conflicts of interest to confirm that Glass Lewis remains independent and objective in the formation of its voting decisions.  Lastly, RiverFront will periodically review a sample of proxy votes to test whether or not the votes were in compliance with Glass Lewis’s stated voting guidelines.

Proxy statements received regarding client securities:

Upon physical receipt of a proxy, it is forwarded to Broadridge/Mediant for processing.

Note: RiverFront is permitted to rely on proxy statements filed on the SEC’s EDGAR system instead of keeping its own copies.

Proxy voting records:

Proxy voting records for proxies voted by Broadridge are available via ProxyEdge, which is the web-based database. Proxies voted by Mediant are available via Mediant Communications Proxy Manager.

Disclosure

RiverFront will ensure that Part 2 of Form ADV is updated as necessary to reflect: (i) all material changes to the Proxy Voting Policy and Procedures; and (ii) information about how clients may obtain information on how RiverFront voted proxies. 

Responsibility

The CCO and designee are responsible for managing the relationship with Broadridge and Mediant and ensuring that all proxies are being properly voted and that Broadridge/Mediant is retaining all of the appropriate proxy voting records.