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Amendments to Proxy Processing Fees

Peter J. Rivas
Jones Walker LLP - Washington Office

February 3, 2014

Previously published on January 23, 2014

On January 10, 2014, the Securities and Exchange Commission ("SEC") approved changes to New York Stock Exchange ("NYSE") and FINRA rules governing processing of beneficial shareholder communications and proxy voting. The new rules provide reimbursement guidelines for broker-dealers and custodian banks that receive fees for services performed in connection with forwarding proxy communications to their clients' accounts. These new rules are effective for all shareholder meetings with a record date on or after January 1, 2014.

The revised fees resulted from an independent Proxy Fee Advisory Committee ("PFAC") formed by the NYSE in September 2010. PFAC was comprised of representatives of public companies, institutional investors, and broker dealers—it issued a 2012 report that led to the NYSE's proposed fee changes, and FINRA revised its rules to conform to NYSE's rules.

Current fees were revised and the net change to any one corporate issuer will vary based on the issuer's size (as measured by the number of an issuer's beneficial shareholders), method by which an issuer's shareholders receive proxy communications, an issuer's service choices, and other factors.

These revised fees seek to align fees that issuers pay to corresponding work performed, and provide public companies with efficiencies through use of NOBO (non-objecting beneficial owners) lists requested in connection with annual meetings. The new rules provide a one-time, five-year incentive for broker-dealers to provide to shareholders a direct connection to proxy voting through online brokerage platforms.


The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.

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