Andrew Beck on Canadian impact of proposed changes to SEC rules

February 20, 2020

Capital Markets’ partner Andrew Beck has told Benefits Canada that resistance from investors using proxy advisory firms could see the SEC renege on one of its proposed rule changes that says issuers of stock can increase their involvement in how proxy advisory firms establish recommendations on their own companies.

The article discusses two of the proposed rules changes by the SEC that have caught the attention of Canadian institutional investors—proxy voting practices and shareholder rights.

Andrew said investors seeking clear, unbiased advice from proxy advisory firms don’t want to be frustrated by increased interaction and that “substantial pushback” could prevent that rule change.

“That’s a proposal that I don’t think is going to go anywhere,” Andrew said.

The article also touches on the proposed change to the “eligibility requirements for shareholders to make resolutions on which stock owners can vote, and to introduce a tiered system whereby a shareholder’s right to make resolutions would depend on how long they hold a given stock.”

Andrew told the publication that stakeholders may want to discourage shareholder votes because of the cost it takes to carry them out.

“All things being equal, you don’t necessarily like to see the company spending a lot of money,” Andrew said.

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