Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.

Get updates on Compliance Week offerings, including new features, databases, research, and other resources, along with announcements of upcoming Webcasts, conferences, seminars, CPE/CLE opportunities and more.

Published every Thursday, Compliance Week Europe offers a condensed summary of risk, audit, and compliance news either originating in Europe, or of special interest to European compliance professionals. This newsletter will follow developments by the European Commission, as well as those of national governments across the region, or any U.S.-based news that might have consequence across the Atlantic. Frequency: weekly; Thursday a.m.

A fresh edition of Compliance Week delivered via e-mail and online every Tuesday morning, relentlessly focused on the disclosure, reporting and compliance requirements of our 25,000+ paying subscribers.

Published every Friday, Compliance Weekend was launched at the behest of subscribers, and offers a quick Plain English review of the week's key developments. We hope you enjoy this supplement to Compliance Week's Tuesday edition.

PFAC Pushes Changes to Proxy Distribution Fees

Joe Mont | May 17, 2012

The Proxy
Fee Advisory Committee (PFAC), formed by the New York Stock Exchange, has released recommendations for changing the fees paid by public companies to banks and
brokers for the distribution of proxy materials to shareholders who hold their
stock in “street name.” 

The recommendations
propose to streamline proxy fees and make them more transparent to issuers. It
lays out steps that it says could result in a “modest” decrease in total fees paid
of approximately 4 percent.

distribution fees have been part of the NYSE's rules since 1937 and have been reviewed
and changed periodically over that time,” Scott Cutler, Co-Head of U.S. Listings
and Cash Execution and member of the PFAC Committee, said in a statement. “The NYSE has long operated under
the assumption that these fees should represent a consensus view of the issuers
and the broker-dealers involved.”

Although it “recognizes
that there is a reliable, accurate, and secure proxy distribution process in
place today,” the committee seeks to “bring proxy distribution fees in line
with the work performed and add increased transparency,” the May 16
announcement says.

stated goals have been to support the current proxy distribution system, including
continued support for the elimination of mailings; to encourage and facilitate active
voting participation by retail beneficial owners; improve transparency of the
fee structure and ensure that fees are as fair as possible and aligned with the
work involved.  The fee recommendations
do not take into account potential changes to SEC rules that are being
discussed as part of its “proxy plumbing” effort.

The PFAC recommendations

  • Streamlining
    proxy fees into three basic fee categories (a nominee fee, a basic processing
    fee, and a preference management fee).
  • Providing a
    more gradual tiering of the basic processing fee to smooth the “cliff effect” that
    occurs between large and small issuers.
  • Reducing
    preference management fees for managed accounts to half the normal rate, and
    eliminate all processing fees for managed account positions of five shares or
  • A “modest”
    increase of the processing fees for special meetings and contests.
  • Reducing by
    half the fee for annual meeting reminder notices.
  • Allowing
    issuers to segment non-objecting beneficial owners (NOBO) lists, rather than
    require issuers to pay for complete lists, the current industry practice.
  • Creating an
    ongoing process for reviewing proxy fees and services more frequently.

will initiate discussions regarding the PFAC's recommendations with the SEC, after
which it expects to submit a rule change proposal that would be
published for public comment.