Computershare Ahead of the Curve on Regulatory Change in Transfer Agent Industry
Technological Innovation and Industry Involvement of Key Importance
NEW YORK, Dec. 16, 2010 - Computershare Limited (ASX: CPU), a leading financial services provider for the global securities industry, announced today that their clients will have a full array of new solutions in 2011 to help them meet the challenges of the large amount of reform-related regulations. These regulations will have a major impact on the work of shareholder service, corporate governance and investor relations professionals.
This includes "say-on-pay," the US Internal Revenue Service's (IRS) cost-basis reporting requirements and other corporate governance items included in the Wall Street Reform and Consumer Protection Act (Dodd-Frank).
"We have seen more new regulations in 2010 in the transfer agent industry than any other year I have been in the business," stated Charles Rossi, Executive Vice President of client services at Computershare and President of the Securities Transfer Association. "As a result, we have been very active in adapting our systems and advocating for our clients' best interests in terms of regulations under review, such as the SEC's concept release on reform to the US proxy mechanics.
As for the Dodd-Frank legislated say-on-pay proposal for most issuers, there will also be a related "say-when-on-pay" proposal. This proposal will determine whether the frequency of say-on-pay votes are every one, two or three years, plus an option to abstain. This rule change required rapid system modifications by Computershare, in order to implement and make the voting choices available on their clients' proxy cards, online and via Computershare's automated telephone system. The rule also required flexibility for the ordering of the voting choices, so Computershare will provide for ordering such as "1,2,3, abstain" or "3,2,1, abstain."
"The comment period for the proposed SEC rule ended on November 18, 2010, and our first client mailing that required say-when-on-pay voting choices was just weeks later, on December 6, 2010," said Stuart Irving, Chief Information Officer of Computershare Ltd. "We needed to be exceptionally nimble to adapt the infrastructure around our proxy system and we did it."
In addition, the IRS now requires transfer agents to report cost-basis information, and the new rules will go into effect for covered securities acquired after January 1, 2011. Computershare was extensively involved in discussions with the IRS prior to the release of the regulations, to help shape the outcome and to be ready to provide a compliance solution for the clients in 2011.
"The IRS's cost-basis regulations have required a development effort for nearly every transfer agent-related system at Computershare," said Mr. Irving. "The regulations were not finalized until October 2010 but require an implementation date of January 1, 2011. By being involved, we will be ready to support our clients."
In addition to systems development and industry advocacy, Computershare, along with Georgeson Inc., a Computershare company, has also been very active in communicating with their clients as the proposed regulations became law.
"We have been keeping a close watch over say-on-pay for several years," said David Drake, President of Georgeson. "With each new development, we informed and advised our clients on how the proposed regulations could impact them so they would be ready, no matter what form say-on-pay took."
Proxy reform has been a major issue this year, and may greatly change how issuers communicate with their shareholders. "It has been Computershare's priority to keep our clients aware about this major development so they can make informed decisions about supporting the aspects of proxy reform that will be most beneficial to them, such as better engagement between issuers and shareholders, higher accuracy in proxy vote results and a more efficient model for proxy distribution and communications," added Mr. Rossi. "And, we expect to be following more proposed regulations in 2011 and 2012 so reform and its impact on our clients is far from over."
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.
About Georgeson
Georgeson Inc., a Computershare company, is the world's leading provider of strategic proxy and corporate governance advisory services to corporations and shareholder groups working to influence corporate strategy. For over half a century, Georgeson has specialized in complex solicitations such as hostile and friendly acquisitions, proxy contests and takeover defenses. In 2009, Georgeson was the No. 1 proxy solicitor for M&A transactions worldwide. The firm also provides issuers with expertise in corporate events solutions such as post-merger unexchanged holder programs and information agent services.
For more information, visit www.georgeson.com.
SOURCE Computershare Limited
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Juli Bark
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Jeff Stein
Media Relations
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jeff.stein@computershare.com
Web Site: www.computershare.com
