On May 16, the Proxy Fee Advisory Committee, formed by the New York Stock Exchange in September 2010 to review the fee structure for proxy distribution fees, released its report and recommendations for changes to the fees banks and brokers charge public companies for forwarding proxy materials to shareholders who hold stock in “street name.” The Committee, which includes issuers, broker-dealers and investors, recommended changes to increase the transparency of the fee structure and streamline proxy fees into three basic categories: a nominee fee, a processing fee and a preference management fee (akin to the former “incentive fee”). The Committee’s recommendations also replace the large/small issuer distinction with respect to processing fees with a more gradual tiered fee structure, reduce the fees charged in connection with managed accounts by half, and subject notice and access fees to regulation under the proxy fee structure. The Committee estimates that its recommendations will result in a 4% decrease in the overall proxy distribution fees paid by public companies.
Any change to proxy distribution fees requires SEC approval. In its press release concerning the Committee report, the NYSE indicated that it will discuss the Committee’s recommendations with the SEC and, following these discussions, submit a rule change proposal to the SEC, which will be released for public comment.
The Committee’s report is available at http://usequities.nyx.com/sites/usequities.nyx.com/files/final_pfac_report.pdf.