The CSA has published a report on the proxy voting infrastructure that issues “Protocols“ for public comment aiming to address the (now historically well-documented) information and communication gaps in meeting vote reconciliation. These Protocols are intended to enhance accuracy, reliability and accountability of meeting vote reconciliation by:
- Delineating clear roles and responsibilities for CDS, intermediaries, Broadridge and the meeting tabulator at each stage of meeting vote reconciliation.
- Outlining the operational processes that each of these key entities should implement to fulfil their roles and responsibilities.
The Protocols contain CSA staff expectations on the roles and responsibilities of the key entities and guidance on the kinds of operational processes that they should complement to support accurate, reliable and accountable meeting vote reconciliation.
The Protocols are grouped into the following four divisions:
- Generating and sending accurate and complete vote entitlement information for each intermediary that will solicit voting instructions from beneficial owners and submit proxy votes.
- Setting up vote entitlement accounts (official vote entitlements) in a consistent manner.
- Sending accurate and complete proxy vote information and tabulating and recording proxy votes in a consistent manner.
- Informing beneficial owners of rejected/pro-rated votes.
Examples of the guidance contained in the Protocols include:
- Guidance on how the tabulator can match proxy votes to vote entitlement positions.
- Guidance on how parties should communicate with each other where proxy votes from an intermediary were rejected, uncounted or pro-rated to enable beneficial owners to know if proxy votes submitted in respect of their shares were not accepted at a meeting and the reason why.
As next steps, the CSA intends to establish a technical committee to support the implementation of improvements to meeting vote reconciliation, hold more roundtables, publish the final protocols as a Staff Notice later this year, monitor voluntary implementation of the protocols for the 2017 proxy voting season and consider new rules and guidance.