Should Proxy Advisory Firms Be Regulated In Canada?

On June 21, 2012, the Canadian Securities Administrators (otherwise known as the "CSA") published Consultation Paper 25-401 – Potential Regulation of Proxy Advisory Firms, the purpose of which is to obtain feedback regarding some of the concerns raised by market participants in order to assist the CSA with determining whether there is a need to regulate proxy advisory firms and to outline and solicit feedback on potential regulatory responses and frameworks that may be used to regulate proxy advisory firms.

Proxy advisory firms are businesses that review and analyze matters that are put before shareholders of public companies for a vote. A proxy advisory firm will make a recommendation in respect of a shareholder vote related to a variety of matters involving a voting decision by shareholders, including M&A transactions. Some proxy advisory firms provide additional services to clients, including consulting services on corporate governance matters, automatic vote