Matters being put up for votes at shareholder meetings may follow the path proposed by XBRL US and others on corporate action notices.

Namely: Tag each item with a standard set of fields from the eXtensible Business Reporting Language, so they can organized electronically and reformatted into International Organization for Standardization-compliant messages.

The idea might well become a reality based on the proposal by the Securities and Exchange Commission for corporations to tag their proxy statements. The proposal was part of a broad look into how proxies are distributed and voted released by the SEC on July 14.

“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 Worldwide Interbank Financial Telecommunications in New York. “Such an initiative will likely follow our efforts in the corporate actions arena starting late this year.”

SWIFT, the Depository Trust & Clearing Corp. and XBRL US, the U.S. arm of XBRL International, recently issued a business case outlining the benefits of issuers’ tagging their corporate action notifications in XBRL.

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 Broadridge Financial Solutions, using Broadridge’s proprietary data formats. Broadridge also provides institutional investors with links to the SEC’s website or other publicly available sites to find copies of proxy documents in PDF form.

By contrast, the European Commission’s promotion of electronic proxy voting and confirmation of votes which makes ISO 0222-compliant proxy messages ripe for adoption among subcustodians on the continent.

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 RiskMetrics Group. These agents are hired by global custodians to communicate information on U.S. corporate agendas to subcustodians – banks in foreign markets.

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.

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