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US SEC Asking for Feedback on Proxy Voting Proposals Including Data Tagging

The US Securities and Exchange Commission has just opened a 90 public comment period for consideration of its proposals to modernise the proxy voting system in the country by increasing electronic messaging and XBRL tagging.

Last year, SEC chairman Mary Schapiro launched a comprehensive review of the US proxy system in order to determine a more transparent, accurate and efficient method of registering shareholder votes during corporate actions events. “To result in effective governance, the transmission of this communication between investors and public companies must be timely, accurate, unbiased and fair,” said Schapiro this week.

To this end, the concept release requests comments from the public and the industry about the current state of play with regards to: the accuracy, transparency and efficiency of the voting process; communications and shareholder participation; and the relationship between voting power and economic interest.

Particular areas of concern for the regulator include the over-voting and under-voting of shares, methods of vote confirmation, issuer communication methods, proxy voting by institutional securities lenders and the role of proxy advisory firms. The SEC has also pitched the idea of data tagging proxy related data in order to facilitate the communication of this information to end investors in as efficient a manner as possible.

The introduction of new data tagging requirements would evidently have a significant impact on those acting as third party administrators within the corporate actions sphere.

The full list of items under consideration is available to view here.

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