TORONTO, Nov. 14, 2013 /CNW/ - The Canadian Investor Relations Institute
(CIRI) submitted recommendations to the Canadian Securities
Administrators (CSA) to regulate proxy voting processes so that all
stakeholders have confidence that the system is transparent, reliable
and efficient, which in turn would garner greater confidence and
integrity in the Canadian capital markets.
Accurate and transparent shareholder voting is fundamental to the
quality and integrity of the capital markets. Issuers put forward
important proposals for shareholders to vote on and both parties rely
on the proxy voting system to ensure that those shareholder votes are
collected and counted accurately and efficiently.
CIRI's submission illustrates that Canada's proxy voting infrastructure
is too complex, involving multiple stakeholders using different systems
and databases. This complexity, coupled with the tight timeframes
surrounding annual meetings, make the proxy vote susceptible to errors.
With regulatory intervention there would be greater transparency, which
would contribute to greater certainty in the quality of the shareholder
In the submission, CIRI recommends that the CSA:
Institute appropriate regulation of the proxy voting infrastructure
processes including vote reconciliation and end-to-end vote
In cases of share lending, ensure that the voting power resides with the
shareholder who has the economic interest in those shares.
Conduct further research into the impact the OBO-NOBO concept has on the
transparency and integrity of the proxy voting infrastructure.
Consideration should be given to making NOBO the default option when
establishing brokerage customer accounts and that shareholders with OBO
status be subject to an additional fee.
"Given the importance of the shareholder vote it is imperative that the
vote reconciliation process work efficiently and accurately and that
end-to-end vote confirmation be implemented. We feel this requires
regulatory oversight given that there are so many stakeholders and
systems involved," said Yvette Lokker, President & CEO, CIRI. "The
complexity is compounded by the recent upsurge in stock lending
activities by market participants and inconsistent practices around who
holds the right to vote those loaned shares. We believe the investor
who has the economic interest in the shares should be the one voting
CIRI's recommendations, filed on November 13, 2013, are in response to
the CSA Consultation Paper 54-401: Review of the Proxy Voting Infrastructure published in August 2013.
CIRI is a professional, not-for-profit association of executives
responsible for communication between public corporations, investors
and the financial community. CIRI contributes to the transparency and
integrity of the Canadian capital market by advancing the practice of
investor relations, the professional competency of its members and the
stature of the profession. With close to 600 members and four chapters
across the country, CIRI is the voice of IR in Canada. For further
information, please visit CIRI.org.
SOURCE: Canadian Investor Relations Institute
For further information:
President & CEO
Canadian Investor Relations Institute (CIRI)