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NIRI Supports SEC Review of U.S. Proxy System

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NEWS RELEASE
For Immediate Release: July 14, 2010
Contact: Matt Brusch (703) 506-3574
mbrusch@niri.org

NIRI Supports SEC Review of U.S. Proxy System


Vienna, VA – The National Investor Relations Institute (NIRI) announced its support of the decision by the Securities and Exchange Commission (SEC) today to issue a concept release on the U.S. proxy system. The SEC voted today to issue a concept release to consider revisions to its rules to promote greater efficiency and transparency in the U.S. proxy system and enhance the accuracy and integrity of the shareholder vote.

NIRI has, through its association with the Shareholder Communications Coalition, advocated for a comprehensive review of the U.S. proxy voting infrastructure. NIRI has also advocated for related issues including greater proxy advisory service regulatory oversight and transparency, and a stronger institutional share ownership disclosure regime.

NIRI President and CEO Jeffrey D. Morgan said, “We are pleased the SEC is opening up this discussion as our shareholder proxy voting system is decades old and needs to be updated and reformed. This is a unique opportunity for investors, issuers and all involved to come together to develop a better system. NIRI urges issuers to use the SEC’s 90 day comment period to submit specific problems they have had with proxy mechanics and suggest improvements.”

Morgan concluded, “Comprehensive improvements to the U.S. proxy voting system, including those made to enable public companies to better understand who owns their shares and more effectively and efficiently communicate with these shareholders, will ultimately result in increased public confidence in the integrity of the U.S. securities markets.”

Specific issues to be addressed include:

• Eliminating barriers between public companies and their beneficial owners holding shares in “street name,” so that companies are able to know who their shareholders are and can communicate with them directly. Beneficial owners wishing to remain anonymous should be permitted to register their shares in a nominee or custodial account with their broker or bank.

• Improving the integrity of the proxy voting system and ensuring that proxy votes are transparent and verifiable.

• Fostering competition among proxy service providers. Companies should be able to select the distributors of their communications and should not be forced to pay for a system in which proxy fees and intermediary services are determined by third parties.

• Addressing the influence of proxy advisory services, which have an oversized impact on the proxy voting process. These firms should be subject to increased SEC oversight and should be required to make additional public disclosures regarding their standards, methodologies, and conflicts of interest.

• The need for greater equity ownership transparency within the investment community. NIRI favors a reporting regime that promotes more timely and frequent long position reporting, as well as commensurate full and fair short position disclosure.


About the National Investor Relations Institute (NIRI)
Founded in 1969, NIRI (www.NIRI.org) is the professional association of corporate officers and investor relations consultants responsible for communication among corporate management, shareholders, securities analysts and other financial community constituents. NIRI is the largest professional investor relations association in the world with 4,000 members representing 2,000 publicly held companies and $5.4 trillion in stock market capitalization.

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