SEC Expected to Review Rights of Shareholders

The Securities and Exchange Commission is expected to take the first public step in its long-awaited review of shareholders’ rights next week when it takes up the matter of proxy reform.

The SEC, which oversees the securities markets, has scheduled an open meeting next Thursday to consider seeking public comment on proposed changes in its rules governing proxy votes.

The agency will also consider seeking comment on tougher disclosure rules for limited partnership roll-ups.

A proxy is a shareholders’ absentee ballot at a company’s annual shareholders’ meeting.

Companies registered with the SEC must submit proxy statements to shareholders and the agency before the annual meeting. Those statements contain information about the board, such as how much they and top executives are paid.

Shareholder rights advocates have complained that corporate management has an unfair advantage in all proxy votes because SEC rules make it difficult and expensive for dissident shareholders to buck the corporate system.

Existing rules require those seeking to place a proposal before stockholders to have it cleared by the SEC and bars them from communicating with large numbers of other shareholders before such clearance.

SEC Commissioner Richard Y. Roberts told a conference on proxy reform Friday that the SEC is considering, among other topics, improving “investor access to other investors.”