The majority of shareholders in Canada hold their shares through
a broker or other intermediary which in turn holds their shares
with the Canadian Depository for Securities Limited (CDS). Most
voting at shareholder meetings therefore occurs within a layered,
complex and opaque proxy system. This leads to uncertainty as to
whether all of the votes of the true beneficial shareholders are
properly tabulated. The Canadian Securities Administrators (CSA)
have announced proposed changes to the process of vote counting and
reconciliation, which will hopefully result in a more accurate,
reliable and accountable voting system.
The CSA has proposed new protocols for the parties responsible
for vote collection and tabulation. These parties include
CDS, intermediaries such as brokers, Broadridge Investor
Communication Solutions Canada (the main proxy voting agent for
intermediaries) and transfer agents who act as vote tabulators at
shareholder meetings. The new protocols delineate clear roles
for each of these participants at each stage of the process and
outline the operational processes that each should implement to
ensure their roles and responsibilities are fulfilled.
The protocols include:
moving towards a paperless proxy voting system; and
developing end-to-end vote confirmation capability that would
allow beneficial shareholders to receive confirmation that their
voting instructions have been received by their broker or other
intermediary and submitted as proxy votes, and that these proxy
votes have been received and accepted by the transfer agent as
In addition, the CSA intends to establish a committee to promote
better communication, information sharing and problem solving among
the participants responsible for vote collection and
Although the CSA did not identify any vote reconciliation issues
unique to proxy contests, the proposals, if implemented, will
provide greater certainty and transparency for all parties involved
in proxy contests and hopefully will provide beneficial
shareholders with greater comfort that their votes were, in fact,
properly received and counted.
The deadline to comment on the proposed protocols is July 15,
2016. The CSA intends to publish the final protocols by the
end of 2016, in time for the 2017 proxy season. The protocols
will likely be implemented on a voluntary basis initially.
A copy of the CSA amendments can be accessed here.
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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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