The Canadian Securities Administrators (CSA)
published CSA Staff Notice 54-303 which reports on the progress
made in their review of the proxy voting infrastructure and
outlines their next steps in this initiative. The Staff Notice
concludes that the current proxy voting infrastructure is
antiquated and fragmented and needs improvement.
On August 15, 2013 the CSA published for comment CSA
Consultation Paper 54-401 Review of the Proxy Voting
Infrastructure (the Consultation Paper)
outlining a proposed approach to address concerns regarding the
integrity and reliability of the proxy voting infrastructure. For
more information on the Consultation Paper see our August 20, 2013
update, Public Consultation Process for Proxy Voting
Comments and Subsequent Review
The Consultation Paper elicited 32 comment letters. The CSA also
sought feedback through roundtables held by various securities
commissions across Canada between January and March 2014. The
comment letters contained the following key themes:
securities regulators need to take a leadership role in
reviewing the accuracy of vote reconciliation as no single market
participant or set of market participants can access the
information used for vote reconciliation;
over-voting is occurring, indicating that vote reconciliation
is not always occurring accurately; and
there is no consensus among market participants about the
causes or solutions to the problem of over-voting.
To properly evaluate vote reconciliation, the CSA also: (a)
conducted a qualitative review of six uncontested, uncontentious
shareholder meetings held in 2014 and (b) formed a technical
working group of the key parties in the proxy voting infrastructure
to share information about the operations processes, identify
potential gaps in the meeting vote reconciliation process and
discuss possible solutions.
The CSA indicated that its review to date has demonstrated the
need for the following five improvements:
modernizing how meeting tabulators receive omnibus
ensuring the accuracy and completeness of vote entitlement
information in omnibus proxies;
enabling intermediaries to find out their official vote
entitlement for a meeting;
increasing consistency in how tabulators reconcile proxy votes
to official vote entitlements; and
establishing communication between meeting tabulators and
intermediaries about whether proxy votes are accepted, rejected or
The CSA intend to continue their review in 2015 and explore
whether factors such as higher volumes of proxy votes, revocations
of previous proxy votes, and the use of a dissident form of proxy
pose specific challenges to accurate meeting vote reconciliation.
For the 2016 proxy season, the CSA will direct the key entities
that engage in vote reconciliation to work collectively to develop
appropriate industry protocols for meeting vote reconciliation.
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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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.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan 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.
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