Canadian securities regulators are calling on the securities industry to improve the proxy voting process to ensure that shareholder votes are properly counted.

The Canadian Securities Administrators (CSA) Thursday published CSA Staff Notice 54-303 Progress Report on Review of the Proxy Voting Infrastructure, which details its efforts to review the proxy voting infrastructure, and sets out its plans for reform. The report concludes that “the current proxy voting infrastructure is fragmented and needs to be modernized and improved,” and it recommends five improvements to the vote reconciliation process.

The CSA’s five proposed improvements include: modernizing the process for shareholder meeting tabulators receiving information about who is entitled to vote; verifying the information meeting tabulators receive is accurate and complete; enabling intermediaries that submit proxy votes on behalf of clients (such as brokerage firms) to find out how many shares a meeting tabulator has determined that it is entitled to vote; increasing consistency in how meeting tabulators reconcile proxy votes submitted by intermediaries to the shares it is entitled to vote; and, establishing communication between meeting tabulators and intermediaries about whether proxy votes are accepted, rejected or pro-rated.

In the short term, the regulators are directing firms that are involved in the vote reconciliation process to determine the steps they can take to improve vote reconciliation for the 2015 proxy season. For the 2016 proxy season, the CSA says that firms involved in vote reconciliation should “develop industry protocols that, at a minimum, address the five required improvements.”

The CSA intends to oversee the development of these protocols — which should specify the roles and responsibilities that depositories, intermediaries, Broadridge, and meeting tabulators have in the vote reconciliation process, and outline the specific steps that they must follow. The CSA says that it will consider mandating certain aspects of these protocols, or regulating these entities, if necessary.

In the year ahead, the CSA also intends to review proxy contests to determine if there are any vote reconciliation issues that are specific to proxy contests (during the past year it reviewed six uncontested shareholder meetings). The CSA says that it also intends to gain a better understanding of investment dealers’ practices and securities lending programs.