On Friday, January 10, 2014, the Securities and Exchange Commission (SEC) approved changes to NYSE and FINRA rules related to the processing of beneficial shareholder communications and proxy voting. The new rules outline the reimbursements broker dealers and custodian banks receive for the work they perform in connection with forwarding proxy communications to their client accounts. The new rules go into effect for all shareholder meetings with a record date on or after January 1, 2014.
The revised fees are a result of significant analysis and review by an independent Proxy Fee Advisory committee (PFAC) which was formed by the NYSE in September, 2010. The PFAC was comprised of representatives of public companies, institutional investors, and broker dealers. The PFAC’s analysis culminated in a May, 2012 report that led to the NYSE’s proposed fee changes. FINRA revised its rules, similarly, to conform to those of the NYSE.
Fee Revision Highlights
Each of the several existing fees was revised to some degree; some were increased and others were decreased. The net change to any one corporate issuer will vary based on such factors as the issuer’s size and scale (as measured by the number of beneficial shareholders), the method by which the issuer’s shareholders receive proxy communications, the service choices the issuer makes, and other factors.
The revised fees more closely align the fees issuers pay to the work that is performed. The new fees also provide public companies with additional efficiencies through the use of stratified NOBO lists (when requested in conjunction with an annual meeting) and through a one-time, five-year incentive for broker dealers to provide a direct connection to proxy voting from their client-facing internet platforms.
Broadridge welcomes any inquiries about the rule change and the revised beneficial proxy fee structure. For further information, please contact your client service representative, sales associate or Broadridge at firstname.lastname@example.org.
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