Recently, the SEC launched an initiative to educate investors about proxy voting and support greater investor participation in corporate and mutual fund elections. As part of this initiative, the Commission has:
- Amended the SEC’s proxy rules to clarify and provide additional flexibility when companies and other persons are relying on the “e-proxy rules.” Those rules allow a notice to be sent to shareholders indicating that the proxy materials are online and available upon request, rather than requiring a full package of materials containing a proxy card, annual report and proxy statement be sent. The new rule amendments will, among other things, allow shareholders to be provided with additional materials explaining the e-proxy rules. The Commission issued an adopting release related to the amended rules.
- Published a new Investor Alert entitled New Shareholder Rules for the 2010 Proxy Season. The Alert provides investors with information related to the recent changes to broker voting rules and the impact of those new rules on proxy voting.
- Launched a new Spotlight page that provides investors with information on the mechanics of proxy voting, the e-proxy rules, corporate elections and proxy matters generally.
This educational initiative is presumably being launched in response to deacred levels of voting by shareholders following the Commission's adoption of "notice and access" e-proxy rules. Also, with the NYSE's recent elimination of broker "discretionary voting" (the NYSE rule that gave brokers the discretion to vote their customers' shares in uncontested elections when the customers did not provide instructions), concerns have arisen that issuers may not have a quorum at annual meetings.
The Commission's press release announcing the initiative is available at: http://www.sec.gov/news/press/2010/2010-23.htm