Matters being put up for votes at shareholder meetings may follow the path proposed by
Namely: Tag each item with a standard set of fields from the eXtensible Business Reporting Language, so they can organized electronically and reformatted into
The idea might well become a reality based on the proposal by the
“Even before the SEC came up with the recommendation of tagging we considered the potential for translating XBRL tags for proxy statements into proxy voting messages,” says Max Mansur, global market manager at the Society for
Doing so would allow financial intermediaries – namely custodian banks and brokerage firms -- to translate those tags into ISO 20022-compliant corporate action message formats which could then be sent over the global messaging network operated by SWIFT.
Such a scenario avoids the potential for financial intermediaries to make mistakes in how they translate the disparate information on corporate actions provided by issuers.
The same reasoning could be applied to meeting notifications and proxy voting, says Mansur.
SWIFT did create eight new proxy messages encompassing the gamut of corporate meeting notification, voting and vote confirmation in December 2007 but uptake has been weak so far. Those ISO 20022 compliant messages replaced older ISO 15022-messages which were not dedicated to the proxy industry.
While corporate action messages appear to have garnered widespread interest in both the U.S and overseas such is not the case for proxy voting messages.
The ISO-compliant proxy messages have yet to win favor in the U.S. market. Retail and institutional investors typically vote their shares on either paper ballots or through an electronic service provided by
By contrast, the
Mansur says that most of the seven million messages in meeting announcement and voting messages in the older ISO 15022 format now flowing through the SWIFT network are processed by proxy agents such as Broadridge Financial and
The information is then passed onward to foreign investors and by subcustodian banks to the proxy agents to notify them of corporate agendas for foreign corporations. Some foreign fund managers also do vote their shares in U.S corporate meetings using the proxy messages.
However, Mansur is hopeful that the ISO 20022 messages will pick up steam soon. Foreign banks as well as Broadridge and RiskMetrics have indicated an interest in using the more sophisticated message types as are U.S. investment firms who want to
integrate the corporate agenda, timing, voting and voting confirmation processes into their portfolio management systems. Doing so allows portfolio managers and investment analysts to quickly keep track of voting decisions.
In its request for comment on proxy reform last week, the SEC cited the need for investors to receive confirmations of their votes at corporate meetings. That means that ensuring that their votes were cast for the correct agenda.