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Broadridge competitor
slashes fees
Jan
14, 2009
Mediant clients to pay 25 percent less for
proxy processing
Mediant Communications is continuing its challenge to Broadridge Financial
Solutions’ near lock on the business of distributing proxy materials to
beneficial shareholders. Two months ago the firm landed its first broker
client, Legent Clearing, and today it announced it would lower proxy
processing fees for ‘several hundred’ issuers with shares held through that
broker.
The NYSE reviews the fees that Broadridge, acting on behalf of brokers, may
charge listed companies for this work. The basic processing fee is 40 cents
per beneficial account, and Mediant has announced a 25 percent discount.
‘Fees as set by the NYSE are considered high,’ says Arthur Rosenzweig,
Mediant’s president. ‘We believe fees should come down, so we’ve decided to
go lower unilaterally for issuer clients.’
Rosenzweig says he would like to see the end of an era where fees are
‘dictated’ by regulators, and are instead negotiated by issuers and their
brokers or intermediaries. ‘Now that there is competition, there is no need
for there to be any regulation of fees,’ he adds.
Mediant shared the news of the discount with issuers in the weeks leading up
to the public announcement. ‘We’ve spoken to issuer clients and they are
extremely pleased,’ Rosenzweig says.
Jeffrey Morgan, president and CEO of NIRI, notes the development. ‘I believe
the entry of new service providers into the marketplace, providing choice
and competition, is a positive event for customers or, in this case,
issuers,’ he says.
Morgan and his counterparts at
Business
Roundtable, the
National
Association of Corporate Directors, the
Securities
Transfer Association and the
Society of Corporate Secretaries and Governance
Professionals have raised questions about
the lack of competition in proxy services amid a fresh campaign for broader
proxy reform.
The groups, comprising the
Shareholder Communications Coalition,
published a position paper last fall outlining their views of the faults of
the current system and urging the SEC to undertake a comprehensive review.
‘Technology and the markets have developed a great deal in the past two-plus
decades, and I am hopeful the SEC will look seriously at the internal
structure or ‘plumbing’ of the proxy process and the overall ability for
issuers to communicate with their shareholders,’ Morgan says.
By
Anna Snider
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