The European Securities and Markets Authority (ESMA) has published a Discussion Paper which covers the development of the proxy advisory industry in Europe. The purpose of the Discussion Paper is to give an overview of ESMA’s understanding of the functioning of the proxy advisory industry in Europe and to gain evidence on the extent to which market failures may exist in practice that are related to the activities of proxy advisers in Europe. The Discussion Paper focuses on the state and structure of the proxy advisors market in Europe, the methodologies used by proxy advisors, and on discussing the main concerns that have been expressed. The potential policy options in the Discussion Paper range from taking no action to recommending the introduction of formal legislative measures. ESMA will consider the feedback to the Discussion Paper and expects to publish a Feedback Statement in Q4 2012. The Feedback Statement will set out ESMA’s view on whether there is a need for policy action in this area.