Regulatory Action
Proxy voting and communications rules are regulated by the U.S. Securities and Exchange Commission (SEC) and the stock exchanges where securities are traded.
The Business Roundtable Petition (2004)
On April 12, 2004, the Business Roundtable filed a Petition for Rulemaking Regarding Shareholder Communications with the SEC. The Petition urges the SEC to undertake a thorough examination of the rules governing the ways in which public companies communicate with the shareholders of their securities. To date, the SEC has not taken any action on this Petition.
Click here to review the Business Roundtable's 2004 Petition.
Click here to review the Coalition's letter to the SEC regarding the Petition (July 29, 2005).
Click here to review the public comments filed by interested organizations regarding the Business Roundtable Petition (SEC File Number 4-493).
SEC Public Roundtables on Proxy Issues (2004-2007)
Over the past several years, the SEC has conducted four public Roundtables on proxy issues. The first of these Roundtables was held in 2004. Three Roundtables were held in 2007. Click here for more information and links to public statements, comment letters, and other materials provided by these 2004 and 2007 Roundtable discussions.
SEC Actions on Proxy Voting and Communications (2008)
On November 21, 2008, the outgoing Director of the SEC Division of Corporation Finance, John White, noted in a speech that the Commission needs to address the following proxy issues:
- Non-objecting beneficial owner/objecting beneficial owner (NOBO/OBO) issues
- NYSE Rule 452
- Company communications with shareholders
- Overvoting
- Empty Voting
- Ownership thresholds for shareholder proposals
Click here to review a copy of John White's speech of November 21, 2008.
The SEC Notice and Access Rules ("E-Proxy") (2005-present)
In 2005 and 2007, the SEC proposed and finalized rules to facilitate the use of technology to distribute proxy materials to investors in public companies. These rules provide an alternative method for providing proxy voting materials to shareholders using a "notice and access" model. Under this model, a public company posts its proxy materials on a website and provides shareholders with notice that informs them that the materials are available and explains how to access these materials and provide voting instructions.
Click here to review the SEC's proposed rule of December 15, 2005.
Click here to review the SEC's final rule of January 29, 2007, authorizing voluntary use of the "notice and access" model.
Click here to review the SEC's proposed rule of January 29, 2007. This rule proposes to make the "notice and access" model mandatory for public companies.
Click here to review the SEC's final rule of August 1, 2007.
On October 14, 2009, the SEC proposed amendments to the notice and access proxy rules to remove certain regulatory impediments that were reducing retail investor response rates to proxy solicitations using this format.
Click here to review the SEC proposed rule of October 14, 2009.
Click here to review written comments submitted to the SEC on its proposed rule of October 14, 2009.
Click here to review the SEC's final rule amendments of February 22, 2010.
SEC Consideration of the NYSE Rule Amendment on Broker Discretionary Voting (2009)
On February 26, 2009, the SEC released for public comment a proposed amendment to New York Stock Exchange (NYSE) Rule 452. The amendment proposes to eliminate broker discretionary voting in elections of corporate directors.
This amendment was recommended by the NYSE Proxy Working Group in 2006, as a part of its evaluation of the proxy system. More information about the Proxy Working Group and its recommendations can be obtained on the Coalition's Stock Exchange Activity Page.
The Coalition believes that broker discretionary voting should be considered as one component of a comprehensive review of the proxy voting and shareholder communications system.
Click here to review the SEC Release.
Click here to review the comment letter submitted by the Shareholder Communications Coalition on March 27, 2009.
Click here to review the comment letter submitted by the National Investor Relations Institute on March 16, 2009.
Click here to review the comment letter submitted by the Society of Corporate Secretaries & Governance Professionals on March 20, 2009.
Click here to review the comment letter submitted by the Business Roundtable on March 25, 2009.
Click here to review the comment letter submitted by the NYSE Proxy Working Group on March 25, 2009.
Click here to review the comment letter submitted by the Securities Transfer Association on March 27, 2009.
Click here to review the comment letter submitted by Intel Corporation on March 26, 2009.
Click here to review the comment letter submitted by Computershare Limited and Georgeson, Inc. on March 27, 2009.
On April 24, 2009, the Coalition submitted a letter to the SEC requesting full Commission review of any proposed amendment to NYSE Rule 452. Click here to review the Coalition's letter of April 24, 2009.
On July 1, 2009, the SEC approved the NYSE amendment to Rule 452, eliminating broker discretionary voting in director elections.
Click here to review the SEC order approving the NYSE Rule 452 amendment.
On February 22, 2010, the SEC published an Investor Alert to explain the approved amendment to NYSE Rule 452. The SEC also unveiled a new webpage dedicated to explaining the proxy voting process to retail investors.
Click here to link to the SEC Spotlight page containing these educational materials about the proxy process.
SEC Proxy Access Proposal (2009 - present)
On May 20, 2009, the SEC proposed several rule amendments to facilitate shareholder director nominations.
Click here to review the SEC proposal.
Click here to review a letter sent on June 30, 2009, by the Coalition and other organizations, requesting a 30-day extension of the SEC's comment period.
Click here to review the comment letter submitted by the Shareholder Communications Coalition on August 17, 2009.
Click here to review the comment letter submitted by the Business Roundtable on August 17, 2009.
Click here to review the comment letter submitted by Computershare, Ltd. on August 17, 2009.
Click here to review the comment letter submitted by the National Association of Corporate Directors on August 14, 2009.
Click here to review the comment letter submitted by the National Investor Relations Institute on August 13, 2009.
Click here to review the comment letter submitted by the Society of Corporate Secretaries & Governance Professionals on August 13, 2009.
SEC Review of the Proxy System (2009 - present)
On July 1, 2009, the SEC announced that it would conduct a comprehensive evaluation of the proxy voting and shareholder communications system before the end of the year.
Click here to review the testimony of Meredith Cross, SEC Director of the Division of Corporation Finance, on July 29, 2009, regarding this SEC evaluation of the proxy system.
Click here to review the Coalition's Letter to SEC Chairman Mary Schapiro on August 4, 2009, transmitting its Discussion Draft on Public Company Proxy Voting.
Click here to review the response by SEC Chairman Mary Schapiro on August 11, 2009, to the Coalition's submission.
Click here to review the Coalition's comment letter of September 15, 2009, regarding SEC regulatory proposals on proxy disclosure and solicitation enhancements.
Click here to review remarks by SEC Chairman Mary Schapiro on November 4, 2009, regarding proxy mechanics issues.
Click here to review a White Paper on several proxy voting and communications issues, released by the Council of Institutional Investors (CII) on February 18, 2010.
Click here to review the new SEC Spotlight webpage on Proxy Matters, launched on February 22, 2010, to educate investors about proxy voting and the importance of participating in corporate elections.
Click here to review a report released by the SIFMA Proxy Working Group on June 11, 2010, representing the views of the broker-dealer community on the proxy processing system.
Click here to review a Discussion Draft on Proxy Advisory Services, developed by the Society of Corporate Secretaries & Governance Professionals and the National Investor Relations Institute on March 4, 2010.
Click here to review a Discussion Paper on Proxy Mechanics, developed by Computershare, Ltd. and Georgeson, Inc. on May 3, 2010.
On July 14, 2010, the SEC issued a Concept Release, seeking public comment on a wide range of proxy voting and shareholder communication issues.
Click here to review the SEC's Concept Release issued on July 14, 2010.
Click here to review public comments filed with the SEC on this Concept Release.
Click here to review a White Paper developed by the Securities Transfer Associations regarding the costs of a market-based system for proxy distribution on October 14, 2010.
Click here to review the comment letter submitted by the Securities Transfer Association on October 19, 2010.
Click here to review the comment letter submitted by the Shareholder Communications Coalition on October 20, 2010.
Click here to review the comment letter submitted by Business Roundtable on October 20, 2010.
Click here to review the comment letter submitted by the National Investor Relations Institute on October 20, 2010.
Click here to review an analysis developed by Computershare regarding the implementation of a centralized beneficial owner data aggregation function on November 1, 2010.
Click here to review a letter submitted to the SEC by the Shareholder Communications Coalition on January 17, 2012, regarding the regulation of proxy advisory firms.
Separately Managed Accounts (SMAs) (2010)
On June 2, 2010, the Securities Transfer Association (STA) sent a letter to SEC Chairman Mary Schapiro, requesting a review of the current fee system fo proxy communications established by the New York Stock Exchange under NYSE Rule 465. Specifically, the STA requested an SEC evaluation of the appropriateness of suppression and other fees that are being charged for investors in separately managed accounts (SMAs). According to the STA, these fees should not be charged in circumstances where an investor has delegated proxy voting rights to a broker-dealer or other financial intermediary.
Click here to review a copy of the STA letter of June 2, 2010, to the SEC regarding SMA proxy fees.
Stock Exchange Activities
Proxy voting and communications activities are also regulated by the stock exchanges. Click here to learn more about what the stock exchanges are doing to improve the proxy process, including the efforts of the New York Stock Exchange (NYSE) Proxy Working Group.
Click here for more information about how stocks are bought, sold, and traded.
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Some of the terminology on this website can get confusing. Please click here for a Glossary of Helpful Terminology.
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