Proxy rules clarification

Conflicting information on achievable regarding proxy rules. According to chapter 15 :If the customer does not return the proxy, the firm is able to vote on their behalf, but only on insignificant issues but I took the quiz on the proxy rules section and it said unreturned proxies are not counted ?? Can someone please clarify as my test is this week and I want to have correct infomation.

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Hi @Hilarious_scarlet_co - good question!

First, you are correct with your assessment. Here’s a quick snippet from the proxy section you’re referencing:

If the customer does not return the proxy, the firm is able to vote on their behalf, but only on insignificant issues. Also, if the customer returns the proxy signed but without any votes, they are giving the firm the right to vote on their behalf. Prior to mailing the proxies, the issuer makes recommendations on how to vote. With a signed but unvoted proxy, the broker-dealer will follow the issuer’s recommendation and vote accordingly.

The question you came across asked what would occur if a proxy was not returned. The question is purposely vague and does not specifically mention what type of item is being voted on. In general, most proxy items are considered important and significant, so it should be assumed unreturned proxies are generally not counted. However, if they specifically mention insignificant issues in the question or answer, that’s when you should be confident the firm could cast a vote.

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