Problem Statements:
The Case for Change
Sponsored by:
d. The growing cost burden on issuers
Issuers faced a fundamental problem: they did not know who their shareholders were. Understanding who is investing in their company, and being able to engage with them, has long been a top priority. Yet achieving that visibility was costly.
In 2023, the average ASX issuer took 3.5 additional steps beyond the required regulatory disclosure to reach shareholders. These ranged from emails to targeted phone calls, video meetings or follow ups via IR consultants.
76% of issuers paid third party firms to identify underlying investors, yet 38% still could not see how beneficial owners had voted.
Extra steps being taken by issuers to reach their shareholders
(% of respondents in each group)
77% of top tier issuers are paying to see past
the custodian – to limited effect
As one issuer agent put it, “We were spending money just to chase information that the custodian chain could not provide quickly or clearly enough.”
e. The risks for investors
For investors, these issues translated into real operational risk. Our research showed the top risks associated with proxy voting were reputational damage, regulatory penalties, internal audit issues and SLA breaches.
What are the key risks for investors in each meeting?
Custodians noted that ambiguity around deadlines, especially in the absence of a formal proxy record date, often led to over voting and under voting. One custodian explained that the old batch settlement model meant “a vote could be submitted on a position that was out of date within hours. It created a chain of remediation with the registry.”
These pressures created a clear need for a modernised and transparent proxy system.
