Banning brokers from voting mutual fund shareholders' proxies for fund directors could potentially empower mutual fund investors, but could create a problem for some companies, The Wall Street Journal reports.
The New York Stock Exchange rule, decades old, permits brokers to vote proxies for mutual fund shareholders who do not cast a vote. The proposed change would apply only to elections for fund directors. It would still allow other voting issues, like auditor ratifications, to go to a broker vote. However, last fall, NYSE banned the practice last September of allowing broker votes to be used for new investment management contracts.