CSA 92/04 - Review of National Policy Statement No. 41 [CSA Notice - Rescinded]
| Published Date: | 1992-11-20 |
|---|
Introduction
National Policy Statement 41 ("NP 41") provides a procedure to enable issuers to communicate with non-registered holders. Among other things, NP 41 is designed to ensure that proxy-related meeting materials, audited annual financial statements and interim financial statements are sent to non-registered holders of securities. The Canadian Securities Administrators ("CSA") have been monitoring NP 41 since its introduction and over the past few years a number of issues have arisen. The CSA have determined that it is advisable to undertake a review of NP 41 at this time.
Background
NP 41 was approved by the CSA on October 28, 1987. NP 41 was based upon the recommendations of the Joint Regulatory Task Force on Shareholder Communication. That task force was comprised of securities regulators from Ontario, Québec and British Columbia, corporate administrators from Ontario and the federal Corporations Branch, the Toronto and Vancouver Stock Exchanges, representatives from the Canadian Depository for Securities Limited, the Vancouver Stock Exchange Service Corp. (now West Canada Depository Trust Company), the Investment Dealers Association (Québec and Ontario), the Canadian Bankers Association, the Trust Companies Association, the Investment Funds Institute of Canada and the Canadian Corporate Shareholder Services Association (the "CCSSA"). In addition, the views of many other individuals were solicited, and considered, by the CSA when formulating NP 41.
NP 41 recognizes the right of non-registered holders to receive the materials and voting rights that reporting issuers are currently required by corporate and securities legislation to provide to registered shareholders.
NP 41 imposes obligations on various parties within the shareholder communication process. The obligations are imposed within a framework of various time frames, the most important of which is the requirement for a minimum of 25 days between the time of mailing materials by intermediaries to non-registered holders and the meeting in question.
NP 41 was amended in the summer of 1988 by Addendum "A" (Part XII of NP 41) to deal with certain matters, including applications for waivers and exemptions. To date, most applications have involved waivers of time periods as a result of difficulty in meeting the timing requirements of NP 41.
The Industry Implementation and Monitoring Committee
The Industry Implementation and Monitoring Committee (the "IIMC") was formed in 1988 to track the implementation of NP 41. Currently, the IIMC is co-chaired by Mr. Arden Cornford (Assistant to the Corporate Secretary, Dofasco Inc., and President of the CCSSA) and Ms. Cecilia Widup (Assistant Secretary, Inco Limited, and Past President of the CCSSA). The IIMC includes representatives from intermediaries (trust companies, banks, dealers and a third party service company), transfer agents, reporting issuers, depositories and regulators (securities commissions and exchanges).
In late 1991, the IIMC circulated a questionnaire to approximately 100 reporting issuers, including junior issuers, and received 60 responses. The IIMC has also developed separate intermediary and non-registered holder questionnaires for distribution. Copies of all three questionnaires are attached. The CSA encourage reporting issuers, intermediaries and non-registered holders to participate in the IIMC's research by completing the appropriate questionnaire and returning same to the IIMC, care of the address shown at the end of this notice.
The intermediary questionnaire may also be distributed by certain industry groups, including the Canadian Bankers Association. Members of these groups, rather than returning questionnaires to the address shown at the end of this notice, may return completed questionnaires to their respective industry group.
The concerns and potential solutions identified to date have been raised with the IIMC primarily by issuers. The IIMC is continuing to seek input from all interested parties and the full committee of the IIMC has not endorsed any particular solutions advanced to date. Certain issues have, however, generated greater discussion than others. Included among those issues are:
prescribed fees and other costs of compliance with NP 41 (e.g., should prescribed fees be removed and fees left open to negotiation)
conflicts between corporate law and NP 41 (e.g., the ability under the British Columbia Company Act to nominate directors up to 35 days before a meeting)
clarification of non-registered holder voting rights (e.g., where a non-registered holder wishes to attend and vote at a meeting, rather than complete and return a proxy in advance as contemplated under NP 41)
overall clarification and simplification of NP 41 (including the need for waivers or exemptions and the possible elimination of Forms B and C).
Request for Comments
These preliminary concerns underscore the need for a review of NP 41 at this time. Accordingly, the CSA are seeking the information necessary for a comprehensive analysis of whether, and to what extent, changes should be made to NP 41.
In this regard, reporting issuers, non-registered holders, intermediaries, depositories and other interested parties are asked to provide specific comments as to deficiencies with NP 41, together with proposed solutions. Comment on the preliminary issues highlighted above, including costs, as well as on the potential for the creation of a single list of beneficial shareholders, is of particular interest to the CSA.
Commentators should bear in mind the fundamental premise underlying NP 41 and supported by the CSA, namely that non-registered holders are entitled to:
(a) receive proxy-related materials and audited annual financial statements in a timely manner prior to a meeting,
(b) vote at a meeting, and
(c) receive interim financial statements, where so elected.
Commentators should also consider that the trend toward lodging securities with a depository and registering securities in the name of the depository's nominee is likely to increase, with a concomitant increase in the number of non-registered holders.
The CSA understand that persons submitting responses may be concerned from a confidentiality perspective as a result of competitive, commercial or economic considerations. Accordingly, responses will, upon request, be treated as confidential and will not be placed on the public files of the securities regulatory authorities. Public access to such responses will not be permitted except as may be required by law. However, copies of all responses will be circulated among and reviewed and considered by the CSA in connection with this initiative.
Comments should be in writing only, and twelve copies of each comment letter should be delivered to the attention of the CSA. Comments should be submitted on or before January 15, 1993. All comment letters should be delivered to the following address:
Completed questionnaires may also be delivered to the above address. No additional copies of the questionnaires are required.Canadian Securities Administrators
c/o Policy and Legislation
British Columbia Securities Commission
1100 - 865 Hornby Street
Vancouver, B.C.
V6Z 2H4
Questions may be referred to Robert Hudson, Policy Advisor, Policy and Legislation, British Columbia Securities Commission (telephone: 604-660-4883).
Enclosures (3)
November 20, 1992
NATIONAL POLICY NO. 41
QUESTIONNAIRE FOR ISSUERS
PART A - BACKGROUND
1. How would you classify your company?
_______ Senior Issuer _______ Junior/Industrial Issuer
_______ Junior/Mining Issuer _______ Other___________________
2. Please advise the combined number and percent of your outstanding shares held in the Canadian Depository for Securities (CDS & Co.), the West Canada Depository Trust Company (WCDTC) and Depository Trust Company (DTC).
_______ number of shares _______ % of outstanding
3. Please advise the increase in the number and percent of outstanding shares in CDS & Co., WCDTC and DTC in 1991 compared to 1988.
_______ increase in number of shares
_______ increase in % of outstanding
_______ no increase or decrease in number and percent of shares
4. Please advise the number and percent of shareholders represented at your annual meeting in 1988.
_______ number of shareholders _______ % of shareholders
5. Please advise the increase in the number and percent of shareholders represented at your annual meeting in 1991 compared to 1988.
_______ increase in number of shareholders
_______ increase in % of shareholders
_______ no increase or decrease in number and percent of shareholders
6. Would you object to having your identity known to members of the Industry Implementation and Monitoring Committee?
_______ Yes _______ No
7. If no to 6. above, please provide the following information:
_______________________ Name of Issuer
_______________________ Name of Respondent
_______________________ Telephone No. of Respondent
PART B - COSTS
1. Have your annual meeting costs risen since the introduction of National Policy No. 41?
_______ Yes _______ No
2. If yes to 1. above, please identify those areas where your costs have risen and provide an estimate of the percentage increase. (Where possible, please exclude any increases in costs which are the result of normal inflation, estimated at 4% per annum.)
_______ Annual Report printing _______ %
_______ Proxy Material printing _______ %
_______ Mailing costs
_______ Transfer agent _______ %
_______ Mailing agent (IICC or other) _______ %
_______ Intermediaries _______ %
_______ Other (please identify) _______ %
_______________________________
Total _______ %
3. If you responded to 2. above, has your percentage of shares represented by proxy at your Annual Meetings also increased?
_______ Yes _______ No If yes, by what percentage? _______ %
4. Do you believe the $1 per non-registered shareholder fee is appropriate?
_______ Yes _______ No
5. If no to 4. above, what amount do you think would be appropriate?
$ _______
6. Do you believe the $15 minimum fee per intermediary for sending proxy material is appropriate?
_______ Yes _______ No
7. If no to 6. above, what amount do you think would be appropriate?
$ __________
8. Do you provide envelopes for the mailing of proxy materials by intermediaries?
_______ Yes _______ No If no, do you reimburse for envelopes used?
_______ Yes _______ No
9. Do you provide copies of interim reports to intermediaries for forwarding to beneficial owners?
_______ Yes _______ No If yes, do you pay the postage costs?
_______ Yes _______ No
10. If yes to 9. above, do you provide the envelopes in which to mail the interim reports?
_______ Yes _______ No If no, do you reimburse for envelopes used?
_______ Yes _______ No
11. If yes to 9. above, do you pay a handling charge?
_______ Yes _______ No If yes, what is the amount per envelope?
$ __________
12. Do you pay intermediaries' fees and costs for mailing immediately upon receipt of the certificate of mailing?
_______ Yes _______ No If no, in how many days? _______
13. Do you experience problems in processing intermediaries' fees and costs?
_______ Yes _______ No If yes, what are your problems?
_________________________________________
_________________________________________
14. Do you provide advances to cover postage costs?
_______ Yes _______ No
15. Do you believe you are providing excess proxy material to intermediaries?
_______ Yes _______ No
16. If yes to 15. above, do you make any effort to recover excess?
_______ Yes _______ No If yes, how? _____________________
__________________________________
PART C - SEARCH CARDS AND NON-REGISTERED SHAREHOLDER RIGHTS
1. Do you fix a record date for your annual meeting?
_______ Yes _______ No
2. If yes to 1. above, how many days before the meeting date?
_______ less than 35 days
_______ 36 to 40 days
_______ 41 to 45 days
_______ 46 to 50 days
_______ 51 to 55 days
_______ 56 to 60 days
_______ more than 60 days
3. For special meetings, do you request that proxy material be provided to all non-registered shareholders?
_______ Yes _______ No
4. If yes to 3. above, do you receive requests for significantly more sets of proxy material?
_______ Yes _______ No
5. Have you ever requested intermediaries to distribute proxy material to all non-registered shareholders for a routine Annual Meeting?
_______ Yes _______ No
6. If yes to 5. above, were you satisfied with the results?
_______ Yes _______ No If not why not?
_________________________________
_________________________________
7. Do you receive many requests from intermediaries for additional sets of material?
_______ Yes _______ No If yes, what percentage? _______ %
8. Are most search cards returned in a timely fashion?
_______ Yes _______ No
9. If no to 8. above, what percentage are returned late or not at all?
_______ %
10. Do you believe that intermediaries are distributing the material in accordance with National Policy No. 41's schedule of three days from date of receipt?
_______ Yes _______ No If no, what makes you believe this?
_____________________________________
_____________________________________
11. Do you publish the record and meeting dates for your annual meeting in the financial press through CDS seven days before the record date?
_______ Yes _______ No If no, how do you publish?
_____________________________________
_____________________________________
12. Do you request names of participants and their holdings from CDS & Co., WCDTC and DTC 25 days before the record date?
_______ Yes _______ No If no, at what time do you make the request?
_____________________________________
_____________________________________
13. Would you like to have a published list of intermediaries with contact names and telephone numbers?
_______ Yes _______ No If yes, would you be willing to pay for it?
_______ Yes _______ No
14. Do non-registered shareholders mail voting instruction forms directly to you instead of to the intermediary?
_______ Yes _______ No If yes, what do you do with these forms?
_____________________________________
_____________________________________
15. Do you have difficulty at meetings when non-registered shareholders wish to exercise their entitlement to vote?
_______ Yes _______ No
16. If yes to 15. above, how do you handle the situation?
_______ refuse right to vote
_______ accept the voting instruction form but don't vote the shares
_______ advise the shareholder to contact his intermediary
_______ refer the shareholder to the Inspectors of Election
_______ other ___________________________________________
17. If yes to 15. above, do you provide in your proxy statement an instruction for voting for non-registered shareholders?
_______ Yes _______ No
18. Do you provide. a Supplementary Mailing List card with each set of your proxy material sent to intermediaries for distribution to non-registered shareholders?
_______ Yes _______ No If no, why not? ________________________
________________________________________
19. If yes to 18. above, what percentage of these cards are returned to you?
_______ %
20. Is the percentage of cards returned to you approximately equal to the percentage of non-registered shareholders who are represented at the annual meetings?
_______ Yes _______ No If no, what is the difference?
___________________________________
21. Do you request intermediaries to send interim reports or other materials to non--registered shareholders?
_______ Yes _______ No
22. How important is it for you to communicate with your non-registered shareholders?
_______ Very _______ Somewhat _______ Not at all
PART D - GENERAL
1. Do you believe that National Policy No. 41 has been successful in facilitating the delivery of proxy material and interim reports to non-registered shareholders?
_______ Yes _______ No If no, why not? _____________________
____________________________________
2. Are you familiar with the U.S. broker "10-day rule" under which a broker can vote shares on routine items on behalf of a non-registered shareholder within 10 days of the meeting?
_______ Yes _______ No If yes, do you agree with the rule?
_______ Yes _______ No
3. Would you be prepared to provide copies of corporate communications to all non-registered shareholders regardless of whether or not they wanted to receive such communications?
_______ Yes _______ No
4. Which of the following areas of the Policy do you have difficulty in complying with?
_______ notify securities administrators, stock exchanges and clearing agencies 25 days prior to record date.
_______ "early search" requirement to request CDS & Co. and WCDTC to provide a list of participants 25 days prior to record date.
_______ send search cards to participants in "early search" and to intermediaries 20 days prior to record date.
_______ publish notice of record and meeting dates 7 days prior to record date.
_______ establish record date at least 35 days prior to meeting date.
_______ bulk delivery of proxy materials to intermediaries at least 33 days prior to meeting date.
_______ other
________________________________________________________________
_______ none
(Please provide more detail if possible.)
5. Have you ever asked for a waiver or exemption from the Policy?
_______ Yes _______ No
6. If yes to 5. above, for which of the following reasons?
_______ time period too short to make receipt and return of proxies possible
_______ inconsistencies with foreign jurisdiction corporate law
_______ fewer than 25 days between the distribution of material by intermediaries and the date of the meeting
_______ other _______________________________________________________________
7. Would you support a fixed record date for entitlement to vote?
_______ Yes _______ No
8. Are you satisfied with the omnibus proxy system?
_______ Yes _______ No If no, why not?
____________________________________
9. Are you concerned about overvoting of shares?
_______ Yes _______ No
10. If yes to 9. above, please identify those conditions which can give rise to overvoting and provide recommended solutions, if any.
11. Do you think that the Policy should specify mailing/distribution requirements for matters such as notices of reorganization, offers, rights, takeovers, etc?
_______ Yes _______ No
12. Please comment below on any features of the Policy which you would like to see changed (amended, expanded, eliminated, reduced).
Please return to:
c/o Policy and Legislation
British Columbia Securities Commission
1100 - 865 Hornby Street
Vancouver, B.C.
V6Z 2H4
Nov. 2, 1992
INTERMEDIARY QUESTIONNAIRE
SECTION A
1.(A) HOW DOES YOUR FIRM COMPLY WITH NATIONAL POLICY #41?
_______ Utilize I.I.C.C. _______ Utilize Another Agent
_______ Do Your Own Distribution _______ Do some yourself and some with an agent
(B) IF YOUR EXISTING METHOD WAS NOT AVAILABLE, WHAT WOULD YOUR ALTERNATIVE BE?
________________________________
________________________________
2. DO YOU HAVE A PROXY DEPARTMENT?
_______ YES _______ NO
3.(A) HOW DO YOU CONVEY THE NP41 FORM B TO YOUR CLIENTS AND OBTAIN THE FORM C INSTRUCTIONS FROM YOUR CLIENTS?
_______ MAIL OUT FORMS B and C
_______ VERBALLY
_______ OTHER EXPLAIN
___________________________________________
IF MAILED DO YOU PROVIDE A POSTAGE PAID RETURN ENVELOPE?
_______ YES _______ NO
(B) NP41 REQUIRES THAT CLIENTS' INSTRUCTIONS ARE RENEWED ANNUALLY.
(i) DO YOU MAIL OUT FORMS B & C TO YOUR CLIENTS' ANNUALLY?
_______ YES _______ NO
(ii) DO YOU ADVISE YOUR CLIENTS IN WRITING OF THEIR RECORDED ELECTION AND THAT THEIR INSTRUCTIONS CAN BE CHANGED AT ANY TIME BY PROVIDING WRITTEN NOTICE?
_______ YES _______ NO
IF YES PLEASE EXPLAIN HOW YOU COMMUNICATE WITH YOUR CLIENTS (eg. by letter, use of statement, stuffers, etc.)
___________________________________________________________________________________________
(iii) OTHER METHOD, PLEASE EXPLAIN.
___________________________________________________________________________________________
(C) DO YOU AND/OR YOUR CLIENTS FIND THE WORDING OF FORMS B & C AS PRESCRIBED BY NP41 CONFUSING?
_______ YES _______ NO
4.(A) WHAT PERCENTAGE OF YOUR CLIENTS HAVE ELECTED TO RECEIVE SHAREHOLDER COMMUNICATION?
_______ %
(B) WHAT PERCENTAGE OF YOUR CLIENTS DO NOT RETURN FORM C? _______ %
(C) WHAT PERCENTAGE OF YOUR CLIENTS ACTUALLY VOTE? _______ %
5.(A) WOULD YOU BE RECEPTIVE TO THE ABANDONMENT OF FORMS B AND C IN FAVOUR OF THE ADOPTION OF A "LIST OF NON-REGISTERED HOLDERS" WHEREBY INTERMEDIARIES WOULD BE REQUIRED TO PROVIDE ISSUERS/AGENTS WITH A LISTING OF THEIR NON-REGISTERED HOLDERS?
_______ YES _______ NO
(B) IF YOU ARE APPROACHED BY AN ISSUER, WOULD YOU SUPPLY THEM OR THEIR AGENT WITH A LIST OF YOUR CLIENTS WHO ARE NON-REGISTERED HOLDERS OF THAT ISSUE?
_______ YES _______ NO
IF YES ALL CLIENTS?
_______ YES _______ NO
ONLY CLIENTS WHO HAVE SO INDICATED ON FORM C?
_______ YES _______ NO
(C) WHAT PROTECTION WOULD YOU NEED TO ENSURE YOUR CLIENT LISTS ARE NOT USED FOR OTHER PURPOSES?
__________________________________________________________
(D) DO YOU REVIEW MATERIAL BEFORE IT IS MAILED TO YOUR CLIENTS?
_______ YES _______ NO
(E) SHOULD ISSUERS/AGENTS MAIL DIRECT TO YOUR CLIENTS WOULD YOU HAVE ANY CONCERNS FOR CONTENT? IF YES PLEASE EXPLAIN.
___________________________________________________________
(F) WHAT (if any) OTHER CONCERNS WOULD YOU HAVE?
___________________________________________________________
6. WHAT PERCENTAGE OF YOUR CLIENTS ARE WILLING TO HAVE THEIR NAMES DISCLOSED TO ISSUERS?
_______ %
7.(A) DO YOU EXPERIENCE ISSUERS REFUSING TO PAY FEES ASSOCIATED WITH SHAREHOLDER MAILINGS UNDER NP41?
_______ YES _______ NO
(B) HOW DOES YOUR FIRM HANDLE THE COSTS OF DISTRIBUTION IF AN ISSUER REFUSES TO PAY.
_______ Don't Distribute _______ Your Firm Covers Cost
_______ Your Firm Sometimes Covers Costs _______ Other
(C) IF YOUR FIRM COVERS COSTS, WHAT IS THE DECIDING FACTOR?
__________________________________________________________
(D) DO YOU FEEL THAT ISSUERS, WHO ARE IN NON-COMPLIANCE OF NP41, SHOULD BE PENALIZED?
_______ YES _______ NO
(E) IF YES, WHAT PENALTIES WOULD YOU SUGGEST FOR ISSUERS WHO ARE IN NON-COMPLIANCE WITH NP41?
__________________________________________________________
(F) WHAT IS YOUR APPROXIMATE ANNUAL COST OF ISSUERS REFUSING TO PAY?
UNDER $5,000 _______
$5,000 TO $10,000 _______
$10,001 TO $20,000 _______
$25,000 + _______
8.(A) WOULD YOU BE RECEPTIVE TO ABANDONMENT OF THE FEES PRESCRIBED BY NATIONAL POLICY 41 (INCLUSIVE OF THE $15 MINIMUM) IN FAVOUR OF DIRECT NEGOTIATION BETWEEN THE ISSUER AND INTERMEDIARY, OR 3RD PARTY SERVICE COMPANY?
_______ YES _______ NO
(B) DO YOU FEEL THAT THE $15.00 MINIMUM FEE IS:
_______ Too Much _______ Appropriate
_______ Too Little _______ Other
(C) DO YOU FEEL THAT THE $1.00 CHARGE PER ITEM MAILED IS:
_______ Too Much _______ Appropriate
_______ Too Little _______ Other
(D) ANY SUGGESTIONS FOR AN ALTERNATIVE TO THE CURRENT FEE STRUCTURE?
________________________________________________________________
(E) WOULD YOU HAVE ANY CONCERNS WITH A DIRECT NEGOTIATION PROCESS AND, IF YES, WHAT ARE THOSE CONCERNS?
________________________________________________________________
(F) IF THE NEGOTIATION PROCESS REACHED AN IMPASSE, HOW WOULD YOU SUGGEST IT BE RESOLVED?
________________________________________________________________
9.(A) DO YOU FEEL THAT ISSUERS SHOULD BE MANDATED TO RECOGNIZE NON-REGISTERED HOLDERS IN THE WRITTEN INSTRUCTIONS CONTAINED IN THEIR MATERIAL?
_______ YES _______ NO
(B) DO YOU RECEIVE CLIENT COMPLAINTS PERTAINING TO:
(i) _______ Non receipt of material.
(ii) _______ Late receipt of material.
(iii) _______ Receipt of material not wanted.
(iv) _______ Confusion about material received.
10. DO ANY OF THE COMPLAINTS LISTED ABOVE WARRANT FURTHER ACTION?
_______ YES _______ NO
IF YES, WHICH AND WHAT ACTION WOULD YOU SUGGEST?
________________________________________________
11. HAS OVER-VOTING BEEN AN ISSUE FOR YOUR FIRM?
_______ YES _______ NO
IF YES, HOW HAS YOUR FIRM RESPONDED?
_________________________________________________
12.(A) HAVE DISSENTING SHAREHOLDERS (not to be confused with a dissident group) BEEN AN ISSUE FOR YOUR FIRM?
_______ YES _______ NO
IF YES, HOW HAS YOUR FIRM RESPONDED?
_________________________________________________
(B) SHOULD NON-REGISTERED HOLDERS HAVE ALL THE SAME RIGHTS AND ENTITLEMENTS AS REGISTERED OWNERS UNDER THE PROVINCIAL/FEDERAL COMPANIES ACTS?
_______ YES _______ NO
(C) WHAT AREAS OF THE COMPANIES ACTS (AS IT PERTAINS TO SHAREHOLDER COMMUNICATIONS) DO YOU FEEL NEED TO BE ADDRESSED?
__________________________________________________________________
13. IF YOU COULD REMOVE ANY PROBLEMS/ISSUES CREATED BY NP #41, WHAT WOULD THEY BE? (identify problem & describe proposed solution)
__________________________________________________________________
14.(A) HOW IS YOUR FIRM HANDLING SHAREHOLDER COMMUNICATIONS PERTAINING TO (A) REORG NOTICES, (B) BANKRUPTCIES, (C) CLASS ACTIONS.
A B C
Phoning Clients ____ ____ ____
Mailing To Clients ____ ____ ____
Other Methods* ____ ____ ____
* EXPLAIN ________________________________________________________
(B) DO YOU FEEL THAT SOME POLICY SIMILAR TO NP41 WOULD BE AN IMPROVEMENT IN HANDLING SUCH COMMUNICATIONS?
_______ YES _______ NO
15.(A) WOULD YOU BE IN FAVOUR OF A 10-DAY RULE(AS IN THE UNITED STATES) WHEREBY INTERMEDIARIES WOULD BE PERMITTED TO VOTE (IN FAVOUR OF MANAGEMENT) ON NON-CONTENTIOUS/ROUTINE MATTERS IN THE EVENT NO INSTRUCTION HAS BEEN RECEIVED FROM THE NON-REGISTERED HOLDER 10 DAYS PRIOR TO THE MEETING DATE?
_______ YES _______ NO
(B) IF ADOPTED WOULD YOU VOTE YOUR POSITIONS?
_______ YES _______ NO
(C) WOULD YOU HAVE ANY CONCERNS?
_______ YES _______ NO
IF YES PLEASE EXPLAIN _______________________________________________
SECTION B - FOR RESPONDENTS WHO PERFORM THEIR OWN DISTRIBUTION
16.(A) DO YOU UTILIZE VOTING INSTRUCTIONS? _______ YES _______ NO
(eg. OMNIBUS PROXIES)
DO YOU UTILIZE BEARER PROXIES? _______ YES _______ NO
DO YOU UTILIZE ANOTHER METHOD? _______ YES _______ NO
(B) IF YOU UTILIZE ANOTHER METHOD, PLEASE BRIEFLY DESCRIBE IT.
________________________________________________________________
17.(A) IF YOU UTILIZE BEARER PROXIES, IS THERE A REFERENCE NUMBER PUT ON THE PROXY FOR YOU OR THE TRANSFER AGENT TO RELATE THE VOTED PROXY BACK TO THE CLIENT IN THE CASE OF A REVOCATION?
_______ YES _______ NO
(B) DO YOU BALANCE YOUR POSITIONS BEFORE MAILING OUT BEARER PROXIES? (ie. ensure total shares represented by proxies do not exceed holdings directly under your control).
_______ YES _______ NO
(C) IF A CLIENT REFERENCE NUMBER IS NOT INCLUDED ON YOUR BEARER PROXY, HOW DIFFICULT WOULD IT BE FOR YOU TO MODIFY YOUR PROCEDURES TO INCLUDE ONE?
_______ Impossible _______ Difficult
_______ Relatively Easy _______ No Problem
18. HOW DO YOU CALCULATE THE MINIMUM FEE?
_______ By each FINS number.
_______ By each nominee name.
_______ By the aggregate results for your firm.
NATIONAL POLICY STATEMENT #41
NON-REGISTERED HOLDER QUESTIONNAIRE
National Policy Statement #41 provides that as an owner of securities which are not registered in your name but are held on your behalf by your financial intermediary (bank, broker, trust company, etc.) you can elect to receive the same materials which are sent to all registered shareholders. This includes proxy-related materials such as notices of meetings, information circulars, proxies and annual reports or audited financial statements. In addition, you will normally receive a card with the proxy material, which when returned will result in your name being added to a list to whom the issuer will mail interim financial statements. Receipt of all this material is at your option and you may change your decision to receive or not receive material related to the companies in which you invest at any time.
By answering the following questions and returning the questionnaire as noted below, you will assist the Industry Implementation and Monitoring Committee for National Policy Statement No. 41 in its deliberations and decisions about the form and focus of the Policy in the future. Representatives of issuers, financial intermediaries and/or their agents, transfer agents, depositories, stock exchanges and provincial security commissions make up this committee and will all benefit from your input.
Please return to:
c/o Policy and Legislation
British Columbia Securities Commission
1100 - 865 Hornby Street
Vancouver, B.C.
V6Z 2H4
1. Is the right to vote your shares by proxy at shareholder meetings important to you?
_______ Yes
_______ No
2. Receipt of proxy related material and interim financial statements is important to you.
Proxy Material Interim Financials
Very Important _______ _______
Somewhat Important _______ _______
Not At All Important _______ _______
3. Do you return the card requesting that interim financial statements be sent to you?
Always _______
Sometimes _______ When? _______
Never _______ Why? _______
4. Receipt of financial statements, both annual and interim, is of assistance in making your investment decisions.
Annual Interim
Yes _______ _______
No _______ _______
Partly ________ _______
5. Do you return proxies sent with Annual Meeting material?
Always _______
Sometimes _______
Almost Never _______
6. If you elected to receive proxy related material and did not return your proxy, would you feel comfortable if your financial intermediary voted your shares in favour of management on routine items (e.g. election of directors, appointment of auditors) only?
Yes _______
Perhaps _______
No _______
7. Would you object to your name and/or the size of your holdings being revealed to the issuers in which you invest.
Name Holdings
Yes _______ _______
No _______ _______
No Opinion _______ _______
8. Do you think that delivery of proxy related materials and interim financial statements to all non-registered shareholders should be mandatory?
Proxy Material Interim Financials
Yes _______ _______
No _______ _______
No Opinion _______ _______
9. Have you ever been unable to obtain shareholder information from a Canadian company in which you hold shares?
Yes _______
No _______
10. Are you receiving proxy related material in sufficient time for you to complete and return the proxy prior to the meeting date?
Yes _______
Most Of The Time _______
Some Of The Time _______
Hardly Ever _______
11. Do you think that National Policy Statement #41 should require the mailing of items such as notices of capital restructurings, offers, rights issues, etc.?
Yes _______
No _______
No Opinion _______
12. Are you offered annually the opportunity to change your decision about receipt or non-receipt of proxy related materials?
Yes _______
No _______
Have you ever changed your instructions? Yes _______
No _______
13. How many different securities do you own?
1 - 5 _______
6 - 10 _______
Over 10 _______
14. Please make any comment you wish on National Policy Statement #41.