RMA warns SEC against proxy voting changes
03 November 2010 New York
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The Risk Management Association's (RMA) Committee on Securities Lending has called on the Securities and Exchange Commission to support further study of "empty voting" before making changes to the proxy voting system. The SEC sought comments on its Concept Release on the U.S. Proxy System issued in July 2010.
In response, RMA director of securities lending Christopher Kunkle and executive committee chairman Michael McAuley submitted an interim white paper describing a study being conducted by the Center for the Study of Financial Market Evolution (CSFME). Preliminary results of the study find no evidence to support "empty voting" cited by two academics.
In their October 20 comment letter to the SEC, Kunkle and McCauley referenced additional study being done "to obtain further evidence of this process before embarking on a costly and potentially disruptive revision of the proxy system."
Kunkle and McAuley also commented on an SEC proposal to require disclosure of a shareholders' meeting agenda sufficiently in advance of the record date to permit institutional investors to recall shares on loan. Enough notice should be provided for the securities lending agent to carry out the recall of shares in an orderly manner, they said.
In response, RMA director of securities lending Christopher Kunkle and executive committee chairman Michael McAuley submitted an interim white paper describing a study being conducted by the Center for the Study of Financial Market Evolution (CSFME). Preliminary results of the study find no evidence to support "empty voting" cited by two academics.
In their October 20 comment letter to the SEC, Kunkle and McCauley referenced additional study being done "to obtain further evidence of this process before embarking on a costly and potentially disruptive revision of the proxy system."
Kunkle and McAuley also commented on an SEC proposal to require disclosure of a shareholders' meeting agenda sufficiently in advance of the record date to permit institutional investors to recall shares on loan. Enough notice should be provided for the securities lending agent to carry out the recall of shares in an orderly manner, they said.
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