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Note: The letter reported below has been posted by the SEC on its web site page for "Comments on Concept Release on the U.S. Proxy System" responding to the SEC's July 2010 announcement of plans to consider reform:



Forum Report: Electronic Participation in Shareholder Meetings


Response to Proposed SEC Rule Requiring "Forum" Communications

Copied below is the text of a letter sent to the SEC on Friday afternoon in relation to its current review of the U.S. proxy system, specifically in response to the recently reported position of Broadridge Financial Solutions, Inc., advocating new regulations to mandate corporate provision of a "shareholder forum" communication resource.

(To download the actual 3-page letter in printable form, click here.)

Summarizing the letter's observations, a decade of Shareholder Forum experience shows that forum-type communications can be conducted very effectively under existing regulations, and that "there should be no need for SEC regulations to compel what companies and investors can be expected to do voluntarily." It should be noted that in the two weeks since Forum participants were first invited to comment on this, no participant other than Broadridge has expressed a view supporting the suggested new regulation.

Any additional comments will of course be welcomed.

GL – December 20, 2010


Gary Lutin

Chairman, The Shareholder Forum

c/o Lutin & Company

575 Madison Avenue, 10th Floor

New York, New York 10022

Tel: 212-605-0335




The Shareholder Forum

c/o Lutin & Company

575 Madison Avenue – 10th Floor, New York, New York 10022

Telephone: (212) 605-0335


December 17, 2010

By email

Ms. Elizabeth M. Murphy


Securities and Exchange Commission

100 F Street, NE

Washington, DC 20549-1090


Re:       File Number S7-14-10

            Concept Release on the U.S. Proxy System

Dear Secretary Murphy:

It has been reported recently that a prominent service provider, Broadridge Financial Solutions, Inc., has publicly advocated SEC consideration of regulations requiring corporate use of electronic “shareholder forum” communications to promote more effective investor engagement.[1] The eleven-year experience of the Shareholder Forum (the organization) supports many of Broadridge’s views about the benefits of such communication processes, but does not support their view of a need for new regulations.

The Shareholder Forum has been conducting forum-type communications since 1999, initially as a project of the New York Society of Security Analysts intended for member and public education. Its free, open programs are defined to address either company-specific investor decisions or public interest investment issues, and these programs consistently engage the active participation of all relevant marketplace decision-makers, including corporate and investor representatives as well as the professionals concerned with their decisions. These programs have also been consistently effective in providing fair access to the information needed for investor decisions about capital commitments and proxy voting, as well as for decisions about public policy.[2] 

Notably, the past decade’s Shareholder Forum programs have been conducted without the new regulations advocated by Broadridge. As some current members of the SEC Staff may recall, the policies and practices for early Shareholder Forum programs were developed very carefully with Staff guidance to assure compliance with then-existing regulations, and have required only minor refinements to adapt to our use of new communication technologies. The only changes in regulations relating directly to Shareholder Forum communications during this period were the SEC’s 2008 amendments,[3] which made it easier for first-time participants to understand compliance issues and otherwise encouraged the use of electronic technology for forum-type communications. The current regulations should therefore be considered clearly satisfactory for purposes of allowing both corporate and investor participants to fully engage in the legitimate exchanges of information for which our Shareholder Forum programs – and forum-type communications conducted by anyone else – are intended.

All of our Shareholder Forum experience, and particularly in our specifically relevant program for “E-Meetings” communications, supports these conclusions:

1.   Investors want to communicate directly with corporate managers. Most investors, including all types of professional fund managers as well as individual “retail” investors, prefer to obtain information directly from a company’s managers rather than through intermediaries, and forum-type communication processes such as question-and-answer exchanges are considered the most valuable.[4]

2.   Corporate managers want to communicate directly with investors. Most corporate managers are concerned with competing for capital and voting support, giving them a practical interest in communicating directly with investors to understand and respond to their decision-making interests.[5]

3.   Demand for communication services justifies a marketplace response. Both corporate managers and investors can easily justify the costs of electronic communication services that reduce time requirements and otherwise expand their access to high value decision-making information.

Considering these conclusions, there should be no need for SEC regulations to compel what companies and investors can be expected to do voluntarily.

SEC actions relating to other aspects proxy system reform, however, are certainly needed as a foundation for the desired marketplace response. The existing complications of an antiquated records management process are a serious barrier to the application of available communication technologies. As an example, in the course of the Shareholder Forum’s “E-Meetings” program it was discovered that the seemingly simple process of verifying a shareholder’s ownership status for participating in electronic communications requires access to multiple sources of records, all of which involve different access rights and protocols. A special project was able to overcome the obstacles, but a solution to this single element of the communication process required a significant technology development investment that would be unnecessary with a modern, simplified system for securities ownership records.[6]

Please let me know if you want any more information about the Shareholder Forum’s experience. I will welcome questions, from the staff or from other readers, and can be reached by telephone at 212-605-0335 or by email at

Sincerely yours,




Gary Lutin, Chairman


[2] Starting with its first program in 1999, the Shareholder Forum has contributed to public understanding of issues such as fair access to information that led to the SEC’s adoption of Regulation FD. Recent examples include public interest programs that developed interest in “Say on Pay” and then addressed issues relating to its implementation, as well as the current “E-Meetings” program to define standards for electronic communications associated with shareholder meetings.

[3] 17 CFR 240.14a-17; Electronic Shareholder Forums, Release No. 34-57172 (Jan. 18, 2008) [73 FR 4450].

[4] See the October 6, 2010 Forum Report: “Survey of Investor Communication Priorities for Voting Decisions,” previously submitted in response to an SEC request with an October 8, 2010 letter from Gary Lutin of the Shareholder Forum.

is managed by

The Shareholder Forum, Inc.





This Forum program is open, free of charge, to anyone concerned with investor interests in the development of standards for conducting shareholder meetings with electronic participation. As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

The organization of this Forum program was encouraged by Walden Asset Management, and is proceeding with the invited leadership support of Broadridge Financial Solutions, Inc. and Intel Corporation to address issues relevant to broad public interests in marketplace practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can provide both expertise and examples of leadership relating to the issues being addressed.

Inquiries about this Forum program and requests to be included in its distribution list may be addressed to

The information provided to Forum participants is intended for their private reference, and permission has not been granted for the republishing of any copyrighted material. The material presented on this web site is the responsibility of Gary Lutin, as chairman of the Shareholder Forum.

Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.