A voluntary code for the proxy research industry has failed to address concerns around conflicts of interest and the independence of advice, Norway’s sovereign wealth fund has warned.

Norges Bank Investment Management (NBIM), asset manager for the Government Pension Fund Global, told the European Securities and Markets Authority (ESMA) it was unhappy with the scope of the Best Practice Principles for Providers of Shareholder Voting Research (BPP), drafted after the supervisor ruled out further regulation of the proxy adviser market.

Responding to ESMA’s consultation on the BPP’s impact, NBIM said the industry code lacked detail in “key areas”, such as mitigating conflicts of interest.

In a letter, NBIM’s head of active ownership Gavin Grant and CIO of equity strategies Petter Johnsen said: “Specifically, we continue to see clear risk of conflict of interest when voting advisers sell services to both shareholders and issuers.”

The letter – noting that the BPP did not require the “detailed disclosure” of all relationships – added: “The practice introduces unavoidable questions about the independence and integrity of the resulting analysis and recommendations provided to investors.”

NBIM said that, due to the lack of adequate self-regulation set out in the BPP, further regulation was “warranted”.

“The nature of regulation may be binding if it then falls into the realm of [EU] or nationally supervised activities,” it said.

Frank Curtiss, head of corporate governance at the UK’s RPMI Railpen, said it would be “premature” to draw any conclusions only a year after the BPP came into force.

He said there were “encouraging early signs” of improvements to transparency around identifying, disclosing and managing conflicts of interest.

Eumedion, the Dutch corporate governance body, said it stood by previous assessments that conflicts of interest would be “appropriately addressed” by the Shareholder Rights Directive and the BPP.