WASHINGTON (CN) – The Security and Exchange Commission is asking the public if the U.S. securities proxy system operates up to expectations and what regulatory changes should be made where the system falls short.
The issues addressed are accuracy, reliability, transparency, accountability and integrity.
Regulation of the proxy solicitation process was one of the original responsibilities assigned to the agency when it was created in 1934. Company shareholders generally entrust their votes on matters before the corporation to another shareholder or group, or proxy.
The agency has made an increasing number of proxy-related rulings in the last decade as the Internet and other technological advances have enabled faster and more efficient communication.
The advances have brought third parties into the proxy system: some solicit proxies from shareholders to bring about particular voting outcomes; some are voting services and tabulators that verify and announce the outcomes of proxy votes; and some are lawyers who advise shareholders on the potential outcomes of different votes.
The agency is particularly concerned with the third parties, and is asking if investors have had difficulty with any of them and if the investors have confidence that voting rights they have granted by proxy are being used according to terms by which they agreed to grant their proxy.
According to financial services provider Broadridge, just over half of the 600 billion shares voted at more than 13,000 shareholder meetings in 2009 were voted by proxy.
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