March 2010

Changes to proxy processing in 2010

As proxy season is fast approaching, you should be aware of industry changes that may affect your planning.

Changes to NYSE Rule 452 in force: As we communicated last year, controversial changes to NYSE Rule 452 that became effective January 1, 2010 eliminated discretionary voting by financial intermediaries for the election of company directors.

Though theoretically only applicable to interlisted Canadian issuers, many U.S. financial intermediaries have extended this practice to their holdings for all issuers. This has resulted in lower voting volumes for broker resolutions, which can be a problem if the basis for quorum is the director resolution. To avoid this issue, CIBC Mellon will designate the auditor resolution as the default for voting quorum purposes, unless you specifically direct otherwise.

STAC dissident proxy guidelines: In an effort to standardize the handling of dissident proxies, the Security Transfer Association of Canada (STAC) will soon release its guidelines for submission of dissident votes for a contentious security holder meeting where a Canadian transfer agent is involved in the distribution of proxy-related materials to registered and/or non-registered security holders. In addition, third party service providers will be expected to follow the same processes. These guidelines should be viewed in conjunction with STAC’s proxy protocol, which provides best practices for those reviewing and voting proxies for security holder meetings.

Looking forward, 2010 is expected to be a big year for changes in the way that proxies are processed, both in Canada and in the U.S. as U.S. commentators have grown increasingly critical of the existing U.S. proxy governance regime. In response the U.S. Securities Exchange Commission (SEC) has signalled that significant changes to proxy mechanics are in the cards and will be rolled out throughout the course of the year. These changes addresses many of the same issues that Canadian National Instrument 54-101 did for Canadian beneficial holders when it was first announced a decade ago.

Through both its membership in STAC and ongoing oversight of Canadian and U.S. regulatory developments, CIBC Mellon remains committed to bringing you up-to-date when changes to the proxy landscape are either announced or implemented.

By James Hinnecke, director, product management

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Inform is provided for general information purposes only and CIBC Mellon Trust Company, CIBC Mellon Global Securities Services Company, CIBC, The Bank of New York Mellon Corporation and their affiliates make no representations or warranties as to its accuracy or completeness. Readers should be aware the content of this publication should not be regarded as legal, tax, accounting, investment, financial or other professional advice nor is it intended for such use.

IN THIS ISSUE

Table of contents A message from our CEO Distribution of financials Changes to proxy processing in 2010 Keane appointed as securityholder search provider New CSA insider reporting régime coming into effect

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