The Canadian Securities Administrators (CSA)
recently provided an update on their ongoing review of proxy voting
infrastructure. The progress report follows the publication of CSA
Consultation Paper 54-401 Review of the Proxy Voting
Infrastructure in August 2013 (the Consultation
The Consultation Paper examined two
issues: (i) the accuracy of vote reconciliation in the current
proxy voting infrastructure; and (ii) what type of shareholder
communication (end-to-end vote confirmation) should be added to the
proxy voting infrastructure to allow shareholders to confirm that
their proxy votes and voting instructions have been property
transmitted, received and tabulated.
Following the Consultation Paper the
CSA conducted roundtables, consultations and a review of six
uncontested shareholder meetings in 2014 held by a variety of
reporting issuers. Its findings to date generally indicate that the
current proxy voting infrastructure needs to be modernized through
improved communication designs and integrated processes.
Specifically, the CSA outlined several key findings:
over-voting is occurring but there was no consensus as to its
intermediaries are not able to access all information used for
vote reconciliation by meeting tabulators (Official Vote
Entitlement) and therefore securities regulators must take
a leadership role in bringing market participants together;
an absence of an industry-wide protocol in proxy vote
intermediaries are not able to verify whether valid proxy votes
are in fact accurately accepted, rejected or pro-rated by meeting
In response to these key findings, its progress report
identified the following five improvements that must be made to the
vote reconciliation process:
modernizing how meeting tabulators receive information about
who is entitled to vote;
ensuring that the proxy vote entitlement information that
meeting tabulators receive is accurate and complete;
enabling intermediaries to access their Official Vote
Entitlement for a meeting;
increasing consistency in the process meeting tabulators employ
to reconcile proxy votes submitted by intermediaries to Official
Vote Entitlements; and
establishing communication between meeting tabulators and
intermediaries about whether proxy votes are accepted, rejected or
This year the CSA intend to review at
least one proxy contest to determine if there are vote
reconciliation issues specific to proxy contests. Factors as the
high volume of proxy votes, revocations of proxies and dissident
forms of proxies may pose specific challenges and it will be
interesting to understand the impact, if any, that such factors
have on the vote reconciliation process.
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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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