The Canadian Securities Administrators (the CSA) published
Consultation Paper 54-401 Review of the Proxy Voting
Infrastructure1 on August 15, 2013.
The CSA is soliciting comments regarding the adequacy of the
Canada's current proxy voting infrastructure in the context of
the continuing increase in shareholder engagement and activism. In
particular, the Consultation Paper focusses on the integrity and
reliability of vote reconciliation under the current system and the
need for an end-to-end vote confirmation system. The Consultation
Paper is a response to recent criticisms regarding the lack of
confidence in the reliability of proxy voting resulting from
absence of sufficient access to information to assess its
The Consultation Paper includes a detailed description of the
current voting infrastructure and the factors that contribute to
the complexity and perceived shortcoming of the current system,
beneficial owners holding of securities through potentially
several layers of intermediaries;
the impact of securities lending and the resulting
multiplication of interests in the same securities;
delegation of voting authority to agents; and
the ability of beneficial owners not to disclose their identity
as "objecting beneficial owners", which limits the
transparency of voting.
The CSA are seeking comments on specific questions on issues for
further review, including
vote reconciliation and confirmation;
the impact of securities lending on generating voting
omnibus proxies and restricted proxies;
over-reporting and over-voting; and
service provider accountability.
The breadth of the consultation questions makes it clear that
this is beginning of potentially long process of regulatory reform.
However, since the focus of corporate law on registered ownership
of securities is clearly out of step with the current reality, a
thorough reconsideration of the voting infrastructure by the
securities regulators is a welcome development. Empty voting,
over-voting and a general lack of comprehension of the mechanics on
the part of ordinary investors are symptoms of a system which
The comment period for the Consultation Paper is open until
November 13, 2013.
Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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