SEC Ruling Highlights the Need to Further Reform the Proxy System

NEW YORK, Aug. 27 /PRNewswire-FirstCall/ -- Computershare Limited (ASX: CPU), a leading financial services provider for the global securities industry, today said that the SEC's ruling on proxy access moves the industry one step closer to broader reforms for the industry's proxy system – allowing for greater transparency of share ownership and more frequent communications with investors.

"With the elimination of the broker discretionary vote on director elections, the forthcoming rules of the Dodd-Frank bill and now with 'proxy access,' there are many more avenues for shareholders to press for significant changes to companies' corporate boards," said Paul Conn, President, Computershare Global Capital Markets. "It is highly likely that companies will now push even harder for related changes to the proxy system to enable companies to identify their shareholders."

As financial reform evolves, shareholder engagement will become more crucial. The proxy access rule will allow groups that own at least 3 percent – for at least three years – of a company's stock to put their nominees for a director on the corporate proxy ballot sent to all the company's shareholders – a significantly less expensive way of gaining corporate control for activists than mailing large quantities of their own proxy ballots. You can find details on what proxy access will mean for US issuers in an alert from Georgeson Inc. and Latham & Watkins.

In a concept release issued July 14, 2010, the SEC is canvassing potential changes to the current proxy system. Many of the changes under consideration would mean companies would, if adopted, get to know who their shareholders are and would have the ability to directly communicate with them. Other aspects of proxy mechanics under review include broker share reconciliation methods, vote confirmations for investors and processes generally intended to improve the overall transparency of the voting system and the integrity of the vote.  Companies have until October 20, 2010, to comment on the SEC's concept release.

If proposed changes in the concept release were enacted, issuers could enhance shareholder dialogue programs and limit the need for activists to use the ballot to air their concerns.

About Computershare

Computershare (ASX:CPU) is a global market leader in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications. We also specialize in corporate trust services, tax voucher solutions, bankruptcy administration and a range of other diversified financial and governance services.

Founded in 1978, Computershare is renowned for its expertise in data management, high volume transaction processing, payments and stakeholder engagement. Many of the world's leading organizations use these core competencies to help maximize the value of relationships with their investors, employees, creditors, members and customers.

Computershare is represented in all major financial markets and has over 10,000 employees worldwide.

For more information, visit www.computershare.com.

SOURCE Computershare Limited