CAMBRIDGE, MA, December 5, 2006 – Harvard Law School Professor Hal S. Scott, Director of The Committee on Capital Markets Regulation, which late last week issued its Interim Report and recommendations on U.S. Public equity markets competitiveness, today issued on behalf of the Committee the following statement to clarify the Committee’s position on the New York Stock Exchange’s recently proposed elimination of broker discretionary voting in NYSE-listed companies’ director elections.
“The Committee supports proposed Rule 452 to eliminate broker voting for directors as applied to corporate issuers in order to assure fairness in the majority vote process. The Committee also believes that the application of Rule 452 to voting by mutual fund shareholders should be reconsidered in light of the practicalities of such situations,” Prof Scott said.
“However, due to an editing error near the Nov. 30 printing deadline for the Interim Report, the Committee was erroneously stated to be requesting the NYSE to reconsider its proposed changes. In fact the Committee’s actual request is sharply limited: the Committee supports proposed Rule 452 and suggests only that the Exchange reconsider how the Rule should apply to mutual funds. Prof Scott added: “Since shareholder rights are a central focus of the Committee’s Report and continuing research, we felt it crucially important to make crystal clear our position on the important proposed director-election rule changes on which the NYSE recently (Oct.24) filed for SEC approval.”
The Committee’s Report will be amended accordingly and the amended Report can be found on the Committee’s website, http://www.capmktsreg.org/
Changes can be found on pages 17 and 106 of the Report.
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