September 17, 2007
I recently read an article in the Motley Fool that indicated you are considering (File No. S7-16-07 and S7-17-07) limiting shareholders rights. I am amazed that you would even consider such a thing. Does this phrase sound familiar:"To protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation." These are your own words, and the changes you propose are directly opposite to them.
I expect your agency to uphold shareholders rights, not to further limit them. Don't forget that corporations are OWNED by shareholders, not by management, not by directors. They need to be more responsible, and more responsive to US.
The idea that a single shareholder must own 5% of a corporation in order to nominate a director is absurd when it comes to the largest corporations. It would limit such nominations to the extremely rich, and institutional investors. (Consider the institutional investor. It seems unlikely that I could convince my mutual fund to nominate a director. That effort would require a 'proxy' solicitation within the mutual fund in order to convince its manager to submit the nomination on behalf of the mutual fund holders. That idea seems to be a nonstarter.) Thus such nominations could only come from a select few. Why not just name them by name in your suggested rules?
I hope you will remember your charter, and decide NOT to implement these rule changes.