The Canadian Securities Administrators on Thursday published for comment a proposed new guidance that aims to make the voting process more credible and reliable.
CSA staff have "identified information and communication gaps in the processes used to tabulate proxy votes submitted by intermediaries on behalf of their beneficial owner clients (known as meeting vote reconciliation," the CSA says in statement announcing the proposals.
To address those issues, the regulators propose new guidance that set out protocols for the key players in the proxy voting process that both outlines the roles and responsibilities of the firms that are involved with shareholder votes (such as investment dealers, shareholder communication firms, and transfer agents), and provides guidance on operational processes for the firms involved with vote reconciliation.
In addition to addressing some of the current concerns with the proxy voting process, the CSA indicates that the protocols will also lay the groundwork for further industry-led reforms, such as the development of end-to-end voting conformation capabilities that would allow shareholders to verify that their votes are properly cast and recorded, and moving to the electronic transmission of vote entitlement and proxy vote information.
"Shareholder voting is one of the most important means by which shareholders can affect an issuer's governance and is fundamental to the quality and integrity of our capital markets," says Louis Morisset, chairman of the CSA and president and CEO of the Autorité des marchés financiers (AMF) in a statement. "As most shareholder voting in Canada occurs through proxy voting, the CSA is committed to increasing the accuracy, accountability and reliability of the proxy voting infrastructure."
The proposals are out for comment until July 15.
The CSA is also planning to hold roundtable meetings in the fall to examine any significant issues that may arise during the comment process.
The regulators aim to have final guidance in place for the 2017 proxy season.
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