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The Securities Industry and Financial Markets Association (SIFMA) today issued a report on the shareholder communications process supporting prudent and balanced enhancements to the current system for shareholder communications and proxy voting. The report stressed the importance of maintaining efficiency, reliability and credibility, along with important investor interests, such as the right to protect the privacy of personal information entrusted to a broker or bank.
The report comes ahead of a re-examination of the shareholder communications and proxy system by the Securities and Exchange Commission, and is designed to provide context and other factual information to help inform that discussion.
In reviewing the current system, which is outlined in the report, SIFMA suggests the following recommendations:
- Ensure investor privacy concerns are not compromised with any changes to the proxy system;
- Ensure any changes to the proxy system do not create a fragmented process;
- Ensure the proxy voting system remains reliable and efficient;
- Ensure the proxy system process continues to be administered by neutral parties; and
- Ensure accelerated development of electronic communications, which offer faster communications at lower cost.
SIFMA also notes in the report that any modifications to the current system should be undertaken with a view to preserving the efficiencies which are already present. SIFMA cautions against proposals to create multiple additional processes or to otherwise fragment or complicate the current system’s operations. Such proposals if implemented could undermine efficiency, reliability and data security, and create an unfavorable experience for retail and other investors, whose interests the system is intended to preserve.
For the full report, click the following link: http://www.sifma.org/regulatory/pdf/SIFMA%20White%20Paper_NOBO-OBO_June%2010%202010.pdf
