Effective February 11, 2013, the Canadian Securities Administrators amended National Instrument 54-101 – Communication with Beneficial Owners of Securities of a Reporting Issuer (“NI 54-101”) and National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”) which introduced the “notice-and-access” procedure (described in more detail below), the simplification of the appointment procedure for beneficial owners as proxy holders and enhanced disclosure requirements regarding the beneficial owner voting process. Notice-and-access may be used for both management and non-management proxy solicitations.
The CSA’s amendments give issuers the possibility, for meetings held on or after March 1, 2013, of delivering trimmed-down notice packages (rather than a full set of paper proxy-related materials) that provide details of where to access online proxy-related materials or order printed materials.
Notice-and-Access
Under the notice-and-access regime, a reporting issuer may deliver proxy-related materials by posting the relevant information circular or, if appropriate, other materials, on SEDAR and an alternate website. The issuer must also send a notice informing registered holders and beneficial owners that such materials have been posted electronically and how to access them.
Under the new process, the notice provided to shareholders may be sent by mail or electronically, provided that prior consent has been obtained. The notice must contain certain specified information, including the time and place of the meeting, the matters to be voted on, where to find the proxy-related materials and how to obtain a paper copy of the information circular or other documents. Beneficiaries may give standing instructions to their intermediaries to obtain paper copies whenever an issuer uses notice-and-access.
Beneficial Owner Proxy Appointment
The amendments simplify the process by which beneficial owners are appointed as proxies by giving issuers and intermediaries more flexibility to determine their own specific arrangements.
Management or the intermediary must appoint a non-objecting beneficial owner (“NOBO”) or its nominee as a proxy holder if the NOBO has so instructed management in any written form. The NOBO or nominee must be given authority to attend, vote and otherwise act for management in respect of all matters at the meeting, unless giving such authority is prohibited by corporate law (such as s. 153 of the CBCA).
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