Subject: File No. S7-14-10
From: hans-martin buhlmann
Affiliation: ceo, physical proxy agency: VIP

August 3, 2010

proxy voting has to be distinguished in two groups normal items on the normal agendas, here the electronic-platform voting is in the best interest of shareholders (as cheapest way), and on the other hand special cases (in average about 10% of events), where physical-intelligent presence of an proxy-agent during the meeting /AGM/EGM is necessary and reasonable.
In both groups the freedom of interest is the essential criteria to keep an agent independent: no turn over with issuer-side which in experience is much () more easy than from equity-side. Very few recommendation and proxy agencies follow this guidance, more or less transparent. By power of more votes wrong (in rules of conflict of interests) payments will increase.

Necessity of physical presence during the meeting (including permanent contacts to their beneficial owners) was extremely clear shown in 2010 INFINEON (ISIN DE0006231004) AGM by strategic changing the procedure in voting and counting the votes the majority from 56% was transferred to a non-majority of 27% - the way to do this was misinterpretation of the instructions sent by electronic platforms. To be clear 220 mio votes have been transformed, this was of the present capital or of the total issued shares

The basic sense of the SEC action can be simply measured in legal-systems where attendance fees are cashed-out to present shares and votes herein are often quorum of more than 100% of issued capital.

The worst world would be an monopole of proxy-agent-market, what is rather logic regarding the great economy of scale in consulting and voting the 1,001st client without any SAS70 audit by clear rules. VIP is a very small unit, but bigger than the 2nd and 3rd in the physical proxy agent market in Germany and continental Europe with 6 bn market capital in assets under voting.

It is finally worth to check who and by what interests fix the voting policy as there is only few reporting about, public speeches and legally done shows often a gap. Treasurers aim to delegate voting responsibility to custody industry in focusing on costs this in my deep believe is the real basic condition of financial crisis which is an responsibility crisis on behalf of many wrong doing superannuation funds.
best regards

Hans-Martin Buhlmann, ceo
VIP (Vereinigung Institutionelle Privatanleger) eV
association of institutional shareholders
association des actionnaires institutionnels
t h e e u r o p e a n p r o x y a g e n t
Bonn VR 7617