Statement by SEC Commissioner:
Statement before the Open Meeting regarding Electronic Shareholder Forums
Commissioner Paul S. Atkins
U.S. Securities and Exchange Commission
November 28, 2007
Thank you, Mr. Chairman. Today's proposal further encourages the use of electronic forums for discussions by and among companies and their shareholders. The use of electronic forums is another step forward towards updating our regulations to utilize 21st century technology.
How electronic shareholder forums will develop is an open question and our proposed rules have deliberately not included any technological specifications for them. I think this principles-based approach is appropriate — to let the users define how to create, develop, and operate such a forum rather than for us to write prescriptive rules.
One part of the new rules exempts communications on electronic shareholder forums from most of the proxy rules. I note that we define the term "solicitation" quite broadly and, as a result, extend the proxy rules to any person who seeks to influence the voting of proxies, regardless of whether the person is seeking authorization to act as a proxy.
I expect the staff plans to monitor the development and usage of electronic shareholder forums for any potentially abusive practices. After all, the intent of Congress in adopting Section 14 of the Exchange Act was to insure that proxy voting was conducted on a fair, honest, and informed basis. If abusive practices are detected, then we may need to revisit the scope and appropriateness of today's exemption that we are granting.
I thank the many individuals from the outside of the Commission who have contributed to our thinking on electronic forums, including those who discussed this issue at our proxy roundtables earlier this year. I also appreciate the efforts of the Division of Corporation Finance — particularly those staff members who parsed through the many comment letters that we received — as well as the Offices of the General Counsel and Economic Analysis.