Shareholder Choice Regarding Proxy Materials, 42222-42239 [E7-14793]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 72, Number 147 (Wednesday, August 1, 2007)]
[Rules and Regulations]
[Pages 42222-42239]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14793]



[[Page 42221]]

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Part II





Securities and Exchange Commission





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17 CFR Part 240



Shareholder Choice Regarding Proxy Materials; Final Rule

Federal Register / Vol. 72, No. 147 / Wednesday, August 1, 2007 / 
Rules and Regulations

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release Nos. 34-56135; IC-27911; File No. S7-03-07]
RIN 3235-AJ79


Shareholder Choice Regarding Proxy Materials

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: We are adopting amendments to the proxy rules under the 
Securities Exchange Act of 1934 to provide shareholders with the 
ability to choose the means by which they access proxy materials. Under 
the amendments, issuers and other soliciting persons will be required 
to post their proxy materials on an Internet Web site and provide 
shareholders with a notice of the Internet availability of the 
materials. The issuer or other soliciting person may choose to furnish 
paper copies of the proxy materials along with the notice. If the 
issuer or other soliciting person chooses not to furnish a paper copy 
of the proxy materials along with the notice, a shareholder may request 
delivery of a copy at no charge to the shareholder.

DATES: Effective Date: January 1, 2008, except Sec.  240.14a-16(d)(3) 
and Sec.  240.14a-16(j)(3) are effective October 1, 2007.
    Compliance Dates: ``Large accelerated filers,'' as that term is 
defined in Rule 12b-2 under the Securities Exchange Act of 1934, not 
including registered investment companies, must comply with the 
amendments regarding proxy solicitations commencing on or after January 
1, 2008. Registered investment companies, persons other than issuers, 
and issuers that are not large accelerated filers conducting proxy 
solicitations (1) may comply with the amendments regarding proxy 
solicitations commencing on or after January 1, 2008 and (2) must 
comply with the amendments regarding proxy solicitations commencing on 
or after January 1, 2009.

FOR FURTHER INFORMATION CONTACT: Raymond A. Be, Special Counsel, Office 
of Rulemaking, Division of Corporation Finance, at (202) 551-3430, 
Securities and Exchange Commission, 100 F Street, NE., Washington, DC 
20549-3628.

SUPPLEMENTARY INFORMATION: The Commission is adopting amendments to 
Rules 14a-3,\1\ 14a-7,\2\ 14a-16,\3\ 14a-101,\4\ 14b-1,\5\ 14b-2,\6\ 
14c-2,\7\ and 14c-3 \8\ under the Securities Exchange Act of 1934.\9\
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    \1\ 17 CFR 240.14a-3.
    \2\ 17 CFR 240.14a-7.
    \3\ 17 CFR 240.14a-16.
    \4\ 17 CFR 240.14a-101.
    \5\ 17 CFR 240.14b-1.
    \6\ 17 CFR 240.14b-2.
    \7\ 17 CFR 240.14c-2.
    \8\ 17 CFR 240.14c-3.
    \9\ 15 U.S.C. 78a et seq.
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Table of Contents

I. Introduction
II. Description of the Amendments
    A. Notice and Access Model for Issuers: Two Options for Making 
Proxy Materials Available to Shareholders
    1. The Notice Only Option: Sending a Notice Without a Full Set 
of Proxy Materials
    a. Contents of the Notice of Internet Availability of Proxy 
Materials
    b. Design of the specified publicly-accessible Web site
    c. Means to vote
    d. Request for paper or e-mail copies
    e. Delivery of a proxy card
    f. Web site confidentiality
    2. The Full Set Delivery Option: Sending a Notice with a Full 
Set of Proxy Materials
    a. Contents of the Notice or incorporation of Notice information
    b. Design of the specified publicly-accessible Web site
    c. Means to vote
    d. Repeat Delivery of a Proxy Card
    e. Web site confidentiality
    3. Differences Between the Full Set Delivery Option and the 
Notice Only Option
    a. Inclusion of a Full Set of Proxy Materials
    b. Request for Copies of the Proxy Materials
    c. 40-Day Deadline
    B. Implications of the Notice and Access Model for 
Intermediaries
    C. Reliance on the Notice and Access Model by Soliciting Persons 
Other Than the Issuer
III. Clarifying Amendments
    A. No Requirement to Provide Recommendations
    B. Deadline for Responding to Requests for Copies After the 
Meeting
    C. Item 4 of Schedule 14A
IV. Compliance Dates
V. Paperwork Reduction Act
VI. Cost-Benefit Analysis
    A. Background
    B. Summary of the Amendments
    C. Benefits
    1. Versatility of the Internet
    2. Reduction in Paper Processing Costs
    3. Reduction in the Cost of Proxy Contests
    4. Environmental Benefits
    D. Costs
    1. Costs Under the Notice Only Option
    2. Costs Under the Full Set Delivery Option
    3. Costs to Intermediaries
    4. Costs to Shareholders
    5. Comments Regarding Unanticipated Costs
    6. Comment on the Complexity of the Notice and Access Model
VII. Consideration of Burden on Competition and Promotion of 
Efficiency, Competition and Capital Formation
VIII. Final Regulatory Flexibility Analysis
    A. Need for the Amendments
    B. Significant Issues Raised by Public Comment
    C. Small Entities Subject to the Amendments
    D. Reporting, Recordkeeping and Other Compliance Requirements
    E. Agency Action To Minimize Effect on Small Entities
IX. Statutory Basis and Text of Amendments

I. Introduction

    On January 22, 2007, we proposed amendments to the proxy rules that 
would require all issuers and other soliciting persons to furnish proxy 
materials to shareholders by posting them on an Internet Web site and 
providing shareholders with notice of the electronic availability of 
the proxy materials.\10\ Under the proposal, issuers and other 
soliciting persons would be permitted to deliver paper or e-mail copies 
of their proxy materials to shareholders along with the notice. The 
proposal was intended to provide all shareholders with the ability to 
choose the means by which they access proxy materials, including via 
paper, e-mail or the Internet, while still affording issuers and other 
soliciting persons flexibility in determining how to furnish their 
proxy materials to shareholders.\11\ In a companion release issued on 
the same date, we adopted the ``notice and access'' model that issuers 
and other soliciting persons may comply with on a voluntary basis for 
proxy solicitations commencing on or after July 1, 2007.\12\
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    \10\ See Release No. 34-55147 (Jan. 22, 2007) [72 FR 4176].
    \11\ For purposes of this release, the term ``proxy materials'' 
includes proxy statements on Schedule 14A [17 CFR 240.14a-101], 
proxy cards, information statements on Schedule 14C [17 CFR 240.14c-
101], annual reports to security holders required by Rules 14a-3 [17 
CFR 240.14a-3] and 14c-3 [17 CFR 240.14c-3] of the Exchange Act, 
notices of shareholder meetings, additional soliciting materials, 
and any amendments to such materials. For purposes of this release, 
the term does not include materials filed under Rule 14a-12 [17 CFR 
240.14a-12].
    \12\ Release No. 34-55146 (Jan. 22, 2007) [72 FR 4148].
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    We received 23 comment letters on the proposal. The vast majority 
of commenters generally supported our goal of increasing reliance on 
technology to improve proxy distribution.\13\ However, many of the

[[Page 42223]]

commenters thought that the Commission's timetable for adopting the 
proposed amendments was too aggressive.\14\ They suggested that we 
postpone adoption of the proposal until we gain experience from 
operation of the voluntary rule.
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    \13\ See letters from AARP, American Business Conference (ABC), 
Automatic Data Processing Brokerage Services Group, now known as 
Broadridge Financial Solutions, Inc. (ADP), Bank of New York (BONY), 
U.S. Chamber of Commerce (Chamber of Commerce), Council of 
Institutional Investors (CII), Commerce Finance Printers Corp. 
(Commerce Finance Printers), Computershare, Dechert LLP (Dechert), 
Kathryn Elmore and Michael Allen (Elmore & Allen), Investment 
Company Institute (ICI), Infosys Technologies Limited (Infosys), 
MailExpress, Reed Smith LLP (Reed Smith), Registrar and Transfer 
Company (Registrar and Transfer), Karl W. Reimers (Reimers), Ayal 
Rosenthal (Rosenthal), Society of Corporate Secretaries and 
Governance Professionals (SCSGP), Securities Industry and Financial 
Markets Association (SIFMA), Mark Snyder (Snyder), Shareholder 
Services Association (SSA), and Securities Transfer Association, 
Inc. (STA).
    \14\ See letters from AARP, ABC, ADP, BONY, Chamber of Commerce, 
CII, Computershare, ICI, Reed Smith, Registrar and Transfer, SCSGP, 
SIFMA, SSA, and STA.
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    Although we acknowledge the timing concerns raised by the 
commenters, we think that it is appropriate to adopt the proposal at 
this time because the model that we are adopting will provide 
shareholders with enhanced choices without changing significantly the 
obligations of an issuer or other soliciting person. The only new 
obligations that the revised notice and access model will impose on 
issuers and other soliciting persons compared to the voluntary rule is 
that an issuer or other person soliciting proxies who wishes to 
initially furnish a full set of proxy materials in paper to 
shareholders will be required to: (1) Post those proxy materials on an 
Internet Web site; and (2) include a Notice of Internet Availability of 
Proxy Materials (Notice) with the full set or incorporate the Notice 
information into its proxy statement and proxy card.\15\
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    \15\ The effective result of the rules is that an intermediary 
must prepare Notices (or incorporate Notice information in its 
request for voting instructions) and create Web sites for all 
issuers for which securities are held by the intermediary's 
customers, rather than only for issuers who elect to follow the 
notice and access model under the voluntary system.
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    Furthermore, under the phase-in schedule that we are establishing 
for expanding the notice and access model to all issuers and other 
soliciting persons, the largest public companies will become subject to 
the model a year before any other companies become subject to the 
model. Most of these companies already appear to post their proxy 
materials and Exchange Act reports on an Internet Web site.\16\ A large 
accelerated filer (not including registered investment companies) will 
have to comply with the notice and access model for solicitations 
beginning on or after January 1, 2008.\17\ All other issuers (including 
registered investment companies) and soliciting persons other than 
issuers will have to comply with the model for solicitations beginning 
on or after January 1, 2009. This tiered system of implementation 
addresses the commenters' timing concerns by providing the Commission 
with a significant test group of large accelerated filers from which to 
obtain operating data and more than a full year to study the effects of 
the notice and access model and make any necessary revisions to the 
rules before they apply to other entities.
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    \16\ Based on a random sampling of 150 large accelerated filers, 
approximately 80% of such filers already post their proxy materials 
on a non-EDGAR Web site, while almost all of the rest provide a link 
on their Web site to the Commission's EDGAR system. Only a small 
handful of such filers do not post their proxy materials on their 
Web site at all. We note, however, that currently there is no 
requirement that such Web sites preserve the anonymity of persons 
accessing the Web site. See Section II.A.1.f of this release for a 
description of this requirement.
    \17\ A large accelerated filer, as defined in Exchange Act Rule 
12b-2 [17 CFR 240.12b-2], is an issuer that, as of the end of its 
fiscal year, has an aggregate worldwide market value of the voting 
and non-voting common equity held by its non-affiliates of $700 
million or more, as measured on the last business day of the 
issuer's most recently completed second fiscal quarter; has been 
subject to the requirements of Section 13(a) or 15(d) of the 
Exchange Act for a period of at least twelve calendar months; has 
filed at least one annual report pursuant to Section 13(a) or 15(d) 
of the Exchange Act; and is not eligible to use Forms 10-KSB and 10-
QSB for its annual and quarterly reports.
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    In addition, several commenters were concerned that the proposals 
would have required all issuers to establish Internet voting platforms 
\18\ or to prepare their proxy materials at least 40 days prior to the 
shareholder meeting,\19\ and therefore would impose significant costs 
on issuers. As discussed in detail below, the final rules do not 
require, and the proposals would not have required, an issuer or other 
soliciting person to establish an Internet voting platform. Similarly, 
the rules do not require an issuer or other soliciting person that 
sends a full set of proxy materials to shareholders to prepare its 
proxy materials at least 40 days prior to the meeting.
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    \18\ See letters from ABC, BONY, and Registrar and Transfer.
    \19\ See, for example, letters from Chamber of Commerce, CII, 
Commerce Financial Printers, Elmore & Allen, ICI, and STA.
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II. Description of the Amendments

    Under the amendments, an issuer that is required to furnish proxy 
materials to shareholders under the Commission's proxy rules must post 
its proxy materials on a specified, publicly-accessible Internet Web 
site (other than the Commission's EDGAR Web site) and provide record 
holders with a notice informing them that the materials are available 
and explaining how to access those materials.\20\ Intermediaries also 
must follow the notice and access model to furnish an issuer's proxy 
materials to beneficial owners. Persons other than the issuer 
conducting their own proxy solicitations must comply with the notice 
and access model as well. By requiring Internet availability of proxy 
materials, the amendments are designed to enhance the ability of 
investors to make informed voting decisions and to expand use of the 
Internet to ultimately lower the costs of proxy solicitations.
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    \20\ See revised Rule 14a-3(a). The notice and access model does 
not apply to a proxy solicitation related to a business combination 
transaction. See Rule 14a-16(m) [17 CFR 240.14a-16(m)]. Also, as 
with the voluntary model, the notice and access model does not apply 
if the law of the issuer's state of incorporation would prohibit 
them from furnishing proxy materials in that manner. See Rule 14a-
3(a)(3)(ii).
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A. Notice and Access Model for Issuers: Two Options for Making Proxy 
Materials Available to Shareholders

    The notice and access model allows an issuer to select either of 
the following two options to provide proxy materials to shareholders: 
(1) The ``notice only option'' and (2) the ``full set delivery 
option.'' Under the notice only option, an issuer will comply with the 
same requirements that we adopted in connection with the voluntary 
notice and access model. Under these requirements, the issuer must post 
its proxy materials on an Internet Web site and send a Notice to 
shareholders to inform them of the electronic availability of the proxy 
materials at least 40 days before the shareholders meeting. If an 
issuer follows this option, it must respond to shareholder requests for 
copies, including a shareholder's permanent request for paper or e-mail 
copies of proxy materials for all shareholder meetings.
    Under the full set delivery option, an issuer can deliver a full 
set of proxy materials to shareholders, along with the Notice. An 
issuer need not prepare and deliver a separate Notice if it 
incorporates all of the information required to appear in the Notice 
into its proxy statement and proxy card,\21\ and it need not respond to 
requests for copies as required under the notice only option.
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    \21\ If not soliciting proxies, an issuer may incorporate the 
Notice information into its information statement.
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    An issuer does not have to choose one option or the other as the 
exclusive means for providing proxy materials to shareholders. Rather, 
an issuer may use

[[Page 42224]]

the notice only option to provide proxy materials to some shareholders 
and the full set delivery option to provide proxy materials to other 
shareholders. We describe both options in greater detail below.
1. The Notice Only Option: Sending a Notice Without a Full Set of Proxy 
Materials
    We are adopting the notice only option substantially as proposed. 
Under the notice only option, an issuer will follow the same procedures 
that we have established under the existing notice and access model 
that issuers may choose to comply with on a voluntary basis for proxy 
solicitations commencing on or after July 1, 2007.\22\ Under these 
procedures, the issuer must send a Notice to shareholders at least 40 
calendar days before the shareholder meeting date, or if no meeting is 
to be held, at least 40 calendar days before the date that votes, 
consents, or authorizations may be used to effect a corporate action, 
indicating that the issuer's proxy materials are available on a 
specified Internet Web site and explaining how to access those proxy 
materials.\23\ Issuers may household the Notice pursuant to Rule 14a-
3(e).\24\
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    \22\ See Rule 14a-16 [17 CFR 240.14a-16].
    \23\ Rule 14a-16(a)(1) [17 CFR 240.14a-16(a)(1)].
    \24\ 17 CFR 240.14a-3(e).
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a. Contents of the Notice of Internet Availability of Proxy Materials
    The Notice must contain the following information: \25\
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    \25\ Rule 14a-16(d) [17 CFR 240.14a-16(d)]. Appropriate changes 
must be made if the issuer is providing an information statement 
pursuant to Regulation 14C, seeking to effect a corporate action by 
written consent, or is a legal entity other than a corporation.
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     A prominent legend in bold-face type that states:

    ``Important Notice Regarding the Availability of Proxy Materials 
for the Shareholder Meeting to Be Held on [insert meeting date].
     This communication presents only an overview of the 
more complete proxy materials that are available to you on the 
Internet. We encourage you to access and review all of the important 
information contained in the proxy materials before voting.
     The [proxy statement] [information statement] [annual 
report to security holders] [is/are] available at [Insert Web site 
address].
     If you want to receive a paper or e-mail copy of these 
documents, you must request one. There is no charge to you for 
requesting a copy. Please make your request for a copy as instructed 
below on or before [Insert a date] to facilitate timely delivery.''

     The date, time, and location of the meeting or, if 
corporate action is to be taken by written consent, the earliest date 
on which the corporate action may be effected;
     A clear and impartial identification of each separate 
matter intended to be acted on, and the issuer's recommendations, if 
any, regarding those matters, but no supporting statements;
     A list of the materials being made available at the 
specified Web site;
     (1) A toll-free telephone number; (2) an e-mail address; 
and (3) an Internet Web site address where the shareholder can request 
a copy of the proxy materials, for all meetings and for the particular 
meeting to which the Notice relates;
     Any control/identification numbers that the shareholder 
needs to access his or her proxy card;
     Instructions on how to access the proxy card, provided 
that such instructions do not enable a shareholder to execute a proxy 
without having access to the proxy statement; and
     Information about attending the shareholder meeting and 
voting in person.
    The Notice must be written in plain English.\26\ The Notice may 
contain only the information specified by the rules and any other 
information required by state law, if the issuer chooses to combine the 
Notice with any shareholder meeting notice that state law may 
require.\27\ However, the Notice may contain a protective warning to 
shareholders, advising them that no personal information other than the 
identification or control number is necessary to execute a proxy.\28\ 
In addition, a registered investment company may send its prospectus 
and/or report to shareholders together with the Notice.\29\ The issuer 
must file its Notice with the Commission pursuant to Rule 14a-6(b) \30\ 
no later than the date that it first sends the Notice to 
shareholders.\31\
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    \26\ Rule 14a-16(g) [17 CFR 240.14a-16(g)].
    \27\ Rule 14a-16(e) [17 CFR 240.14a-16(e)].
    \28\ Rule 14a-16(e)(2)(ii) [17 CFR 240.14a-16(e)(2)(ii)].
    \29\ See new Rule 14a-16(f)(2)(iii).
    \30\ 17 CFR 240.14a-6(b).
    \31\ Rule 14a-16(i) [17 CFR 240.14a-16(i)].
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b. Design of the Specified Publicly-Accessible Web Site
    An issuer must make all proxy materials identified in the Notice 
publicly accessible, free of charge, at the Web site address specified 
in the Notice on or before the date that the Notice is sent to the 
shareholder.\32\ The specified Web site may not be the Commission's 
EDGAR system.\33\ The issuer also must post any subsequent additional 
soliciting materials on the Web site no later than the date on which 
such materials are first sent to shareholders or made public.\34\ The 
materials must be presented on the Web site in a format, or formats, 
convenient for both reading online and printing on paper.\35\ The proxy 
materials must remain available on that Web site through the conclusion 
of the shareholder meeting.\36\
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    \32\ Rule 14a-16(b)(1) [17 CFR 240.14a-16(b)(1)].
    \33\ Rule 14a-16(b)(3) [17 CFR 240.14a-16(b)(3)].
    \34\ Rule 14a-16(b)(2) [17 CFR 240.14a-16(b)(2)].
    \35\ Rule 14a-16(c) [17 CFR 240.14a-16(c)]. See Section II.A.3 
of Release 34-55146 (Jan. 22, 2007) [72 FR 4148]. One commenter 
asked the Commission to consider the costs of requiring such 
formats. See letter from ICI. We believe that requiring readable and 
printable formats is important so that shareholders have meaningful 
access to the proxy materials. When determining the readability and 
printability of formats, issuers should consider the size of the 
files because many shareholders do not have broadband connections. 
Although some types of files may be suitable for persons with high-
speed Internet access, the readability and printability of a 
document may be affected significantly by the time that it takes to 
download the document.
    \36\ Rule 14a-16(b)(1) [17 CFR 240.14a-16(b)(1)].
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c. Means To Vote
    An issuer also must provide shareholders with a method to execute 
proxies as of the time the Notice is first sent to shareholders.\37\ 
Several commenters on the proposal questioned whether this provision 
would require all issuers to establish Internet voting platforms.\38\ 
The final rules do not require, and the proposals would not have 
required, an issuer to establish an Internet voting platform. Rather, 
an issuer can satisfy this requirement through a variety of methods, 
including providing an electronic voting platform, a toll-free 
telephone number for voting, or a printable or downloadable proxy card 
on the Web site. As noted above, if a telephone number for executing a 
proxy is provided, such a telephone number may appear on the Web site, 
but not on the Notice because it would enable a shareholder to execute 
a proxy without having access to the proxy statement.
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    \37\ Rule 14a-16(b)(4) [17 CFR 240.14a-16(b)(4)].
    \38\ See letters from ABC, BONY, and Registrar and Transfer.
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d. Request for Paper or E-mail Copies
    An issuer must provide paper or e-mail copies at no charge to 
shareholders requesting such copies.\39\ It also must allow 
shareholders to make a permanent election to receive paper or e-mail 
copies of proxy materials distributed in connection with future proxy 
solicitations, and maintain

[[Page 42225]]

records of those elections.\40\ Further, the issuer must provide a 
toll-free telephone number, e-mail address, and Internet Web site 
address as a means by which a shareholder can request a copy of the 
proxy materials for the particular shareholder meeting referenced in 
the Notice or make a permanent election to receive copies of the proxy 
materials on a continuing basis with respect to all meetings.\41\ The 
issuer also may include a pre-addressed, postage-paid reply card with 
the Notice that shareholders can use to request a copy of the proxy 
materials.\42\
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    \39\ Rule 14a-16(j) [17 CFR 240.14a-16(j)].
    \40\ See Rule 14a-16(d)(5) and (j)(4) [17 CFR 240.14a-16(d)(5) 
and (j)(4)].
    \41\ Rule 14a-16(d)(5) [17 CFR 240.14a-16(d)(5)].
    \42\ Rule 14a-16(f)(2)(i) [17 CFR 240.14a-16(f)(2)(i)].
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e. Delivery of a Proxy Card
    An issuer may not send a paper or e-mail proxy card to a 
shareholder until 10 calendar days or more after the date it sent the 
Notice to the shareholder, unless the proxy card is accompanied or 
preceded by a copy of the proxy statement and any annual report, if 
required, to security holders sent via the same medium.\43\ This 
provision is intended to assist an issuer's efforts to solicit proxies 
if its initial efforts have not produced adequate response. This is 
similar to many issuers' current practice of sending reminder notices 
and duplicate proxy cards to shareholders who have not responded to the 
issuer's original request for proxy voting instructions.
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    \43\ Rule 14a-16(h) [17 CFR 240.14a-16(h)].
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    One commenter remarking on this aspect of the proposals expressed 
concern that shareholders receiving proxy cards separately from the 
proxy statement and annual report may make their voting decisions 
without the benefit of access to those disclosure documents.\44\ We 
appreciate this concern. However, at the point that a shareholder 
receives such a proxy card, the shareholder already would have received 
a Notice that provides information on how the shareholder can access 
the proxy materials and request copies of the materials, if desired. 
Moreover, the shareholder also would receive another copy of the Notice 
with the proxy card. We believe that, at this point, the shareholder 
will have had ample opportunity to either access the proxy materials on 
the Internet Web site or request a copy of those materials.
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    \44\ See letter from CII.
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f. Web Site Confidentiality
    An issuer must maintain the Internet Web site on which it posts its 
proxy materials in a manner that does not infringe on the anonymity of 
a person accessing that Web site.\45\ An issuer also may not use any e-
mail address provided by a shareholder solely to request a copy of 
proxy materials for any purpose other than to send a copy of those 
materials to that shareholder.\46\ The issuer also may not disclose a 
shareholder's e-mail address to any person, except to its agent or an 
employee of the issuer. This disclosure may be made only for the 
purpose of facilitating delivery of a copy of the issuer's proxy 
materials by the agent or employee to a shareholder requesting a copy 
of the materials.
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    \45\ Rule 14a-16(k)(1) [17 CFR 240.14a-16(k)(1)]. See Section 
II.A.1.b.iii of Release No. 34-55146 (Jan. 22, 2007) [72 FR 4148].
    \46\ 46 Rule 14a-16(k)(2) [17 CFR 240.14a-16(k)(2)].
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    Three commenters were concerned about the provisions of the model 
that require a company to maintain the designated Web site in a manner 
that does not infringe on the anonymity of persons accessing the Web 
site.\47\ One commenter was concerned that the prohibition on 
``cookies'' will raise the costs of maintaining Internet Web sites.\48\ 
Conversely, one commenter was concerned that there could be potential 
abuses of shareholder privacy through information tracking and 
collection of information on Internet Web sites.\49\ Similar concerns 
regarding potential abuses of shareholder privacy also were raised with 
regard to the adoption of the voluntary notice and access model.
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    \47\ See letters from CII, ICI, and Reed Smith.
    \48\ See letter from ICI.
    \49\ See letter from CII.
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    Although we recognize that the confidentiality requirements may 
increase the cost of maintaining an Internet Web site, we believe that 
the protection of shareholder information is important. A rule that 
permits issuers to discover the identity of a person accessing the Web 
site could effectively negate a beneficial owner's ability under the 
proxy rules to object to an intermediary's disclosure of that 
beneficial owner's identity to the issuer.\50\ In addition, a rule 
without this prohibition on the issuer may make some shareholders 
hesitant to access the proxy disclosures, which would not promote the 
purposes of this rule. Therefore we have retained this provision of the 
rule to help prevent potential abuses of shareholder information.
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    \50\ See Rules 14b-1(b) and 14b-2(b) [17 CFR 240.14b-1(b) and 
240.14b-2(b)].
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    We do not believe that this requirement will impose any undue 
burden on companies. Under the rule, a company must refrain from 
installing cookies and other tracking features on the Web site on which 
the proxy materials are posted. This may require segregating those 
pages from the rest of the company's regular Web site or creating a new 
Web site. However, the rule does not require the company to turn off 
the Web site's connection log, which automatically tracks numerical IP 
addresses that connect to that Web site. Although in most cases, this 
IP address does not provide companies with sufficient information to 
identify the accessing shareholder, companies may not use these numbers 
to attempt to find out more information about persons accessing the Web 
site. In addition, shareholders still concerned about their anonymity 
can request copies from their intermediaries.
2. The Full Set Delivery Option: Sending a Notice With a Full Set of 
Proxy Materials
    Under the ``full set delivery option,'' an issuer will follow 
procedures that are substantially similar to the traditional means of 
providing proxy materials in paper.\51\ Under this option, in addition 
to sending proxy materials to shareholders as under the traditional 
method, an issuer must:
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    \51\ Under the traditional proxy delivery scheme, issuers could 
send proxy materials to shareholders via e-mail provided they 
followed Commission guidance regarding such delivery, which 
typically required obtaining affirmative consent from individual 
shareholders. See Release No. 33-7233 (Oct. 6, 1995) [60 FR 53458]. 
Issuers may continue to rely on such guidance to send materials 
electronically to shareholders. See Section II.A. of this release.
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     Send a Notice accompanied by a full set of proxy 
materials,\52\ or incorporate all of the information required to appear 
in the Notice into the proxy statement and proxy card; \53\ and
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    \52\ A ``full set'' of proxy materials would contain (1) a proxy 
statement or information statement, (2) an annual report if one is 
required by Rule 14a-3(b) or Rule 14c-3(a), and (3) a proxy card or, 
in the case of a beneficial owner, a request for voting 
instructions, if proxies are being solicited.
    \53\ See new Rule 14a-16(n)(2).
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     Post the proxy materials on a publicly accessible Web site 
no later than the date the Notice was first sent to shareholders.\54\
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    \54\ As discussed below, this date does not have to be at least 
40 days prior to the shareholder meeting date.

Issuers may household the Notice and other proxy materials pursuant to 
Rule 14a-3(e).\55\
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    \55\ 17 CFR 240.14a-3(e).
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a. Contents of the Notice or Incorporation of Notice Information
    Under the final rules that we are adopting, a separate Notice is 
not required if the issuer presents all of the

[[Page 42226]]

information required in the Notice in its proxy statement and proxy 
card.\56\ In the proposing release, we solicited comment on whether we 
should permit the issuer that is sending a full set to incorporate the 
information required in the Notice into the proxy statement and proxy 
card, rather than require that issuer to prepare a separate Notice. 
Although we did not receive any comment on this issue, we do not see a 
compelling reason to require an issuer to include a separate Notice 
when it already is sending a shareholder a full set of proxy materials. 
We believe that providing the Notice information in the proxy materials 
will provide shareholders with sufficient information to access the 
materials on the Internet, while reducing costs to issuers. However, an 
issuer may prepare a separate Notice if it desires.
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    \56\ Because issuers are obligated to provide proxy materials to 
beneficial owners, we recommend that issuers place only information 
required by the Notice that is relevant to all shareholders (record 
and beneficial owners) in the proxy statement, and present 
information that is relevant only to record holders on the proxy 
card so that beneficial owners are not confused by information in 
the proxy statement that would only be applicable to record holders. 
Required information disclosed on the proxy statement need not be 
repeated on the proxy card.
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    The information required in the Notice, or proxy materials if no 
separate Notice is prepared, includes much, but not all, of the 
information that is required under the notice only option, including 
the following: \57\
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    \57\ See new Rule 14a-16(n)(4). Appropriate changes must be made 
if the issuer is providing an information statement pursuant to 
Regulation 14C, seeking to effect a corporate action by written 
consent, or is a legal entity other than a corporation.
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     A prominent legend in bold-face type that states:

    Important Notice Regarding the Availability of Proxy Materials 
for the Shareholder Meeting to Be Held on [insert meeting date].
     The [proxy statement] [information statement] 
[annual report to security holders] [is/are] available at [Insert 
Web site address].

     The date, time, and location of the meeting or, if 
corporate action is to be taken by written consent, the earliest date 
on which the corporate action may be effected;
     A clear and impartial identification of each separate 
matter intended to be acted on and the issuer's recommendations, if 
any, regarding those matters, but no supporting statements;
     A list of the materials being made available at the 
specified Web site;
     Any control/identification numbers that the shareholder 
needs to access his or her proxy card; and
     Information about attending the shareholder meeting and 
voting in person.
    The issuer is not required to provide paper or e-mail copies upon 
request to shareholders to whom it has furnished proxy materials under 
this option because it would already have provided those shareholders 
with a copy of the proxy materials as part of its initial 
distribution.\58\ Therefore, the issuer need not provide instructions 
in the Notice as to how shareholders can request paper or e-mail copies 
of the proxy materials.\59\
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    \58\ See new Rule 14a-16(n)(3)(ii).
    \59\ See new Rule 14a-16(n)(4)(ii).
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    If the issuer prepares a separate Notice, it must be written in 
plain English.\60\ The Notice may contain only the information 
specified by the rules and any other information required by state law, 
if the issuer chooses to combine the Notice with any shareholder 
meeting notice that state law may require.\61\ However, the Notice may 
contain a protective warning to shareholders, advising them that no 
personal information other than the identification or control number is 
necessary to execute a proxy.\62\ The issuer must file any such 
separate Notice with the Commission pursuant to Rule 14a-6(b) no later 
than the date that it first sends the Notice to shareholders.\63\
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    \60\ Rule 14a-16(g) [17 CFR 240.14a-16(g)].
    \61\ Rule 14a-16(e) [17 CFR 240.14a-16(e)].
    \62\ Rule 14a-16(e)(2)(ii) [17 CFR 240.14a-16(e)(2)(ii)].
    \63\ Rule 14a-16(i) [17 CFR 240.14a-16(i)]. If the issuer 
incorporates the contents of the Notice into the proxy materials, a 
separate filing is not required.
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b. Design of the Specified Publicly-Accessible Web Site
    An issuer must post all proxy materials identified in the Notice, 
or proxy statement and proxy card if no separate Notice is prepared, on 
the publicly accessible Web site address specified in the Notice on or 
before the date that it sends the proxy materials to shareholders.\64\ 
The specified Web site may not be the Commission's EDGAR system.\65\ 
The issuer also must post any subsequent additional soliciting 
materials on the Web site no later than the date on which such 
materials are first sent to shareholders or made public.\66\ The 
materials must be presented on the Web site in a format, or formats, 
convenient for both reading online and printing on paper.\67\ The proxy 
materials must remain available on that Web site through the conclusion 
of the shareholder meeting.\68\
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    \64\ Rule 14a-16(b)(1) [17 CFR 240.14a-16(b)(1)].
    \65\ Rule 14a-16(b)(3) [17 CFR 240.14a-16(b)(3)].
    \66\ Rule 14a-16(b)(2) [17 CFR 240.14a-16(b)(2)].
    \67\ Rule 14a-16(c) [17 CFR 240.14a-16(c)]. See Section II.A.3 
of Release 34-55146 (Jan. 22, 2007) [72 FR 4148].
    \68\ Rule 14a-16(b)(1) [17 CFR 240.14a-16(b)(1)].
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c. Means To Vote
    The notice and access model requires an issuer to provide 
shareholders with a method to execute proxies as of the time the Notice 
is first sent to shareholders.\69\ If an issuer follows the full set 
delivery option, the proxy card or request for voting instructions 
included in the full set of proxy materials satisfies this requirement. 
Therefore, the issuer does not need to provide another means for 
shareholders to execute proxies or submit voting instructions for 
accounts receiving proxy materials through the full set delivery 
option.
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    \69\ Rule 14a-16(b)(4) [17 CFR 240.14a-16(b)(4)].
---------------------------------------------------------------------------

d. Repeat Delivery of a Proxy Card
    Even though a proxy card already will be included in the full set 
of proxy materials, an issuer relying on the full set delivery option 
subsequently may choose to deliver another copy of the proxy card to 
shareholders who have not returned the card. This is permissible under 
the current rules, and issuers commonly do so as a reminder for 
shareholders to vote. The reminder proxy card does not have to be 
accompanied by the Notice because the reminder card would have been 
preceded by the proxy statement via the same medium and may be sent at 
any time after the full set of proxy materials has been sent.\70\
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    \70\ See new Rule 14a-16(h)(2).
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e. Web Site Confidentiality
    As under the notice only option, an issuer must maintain the 
Internet Web site on which it posts its proxy materials in a manner 
that does not infringe on the anonymity of a person accessing that Web 
site.\71\ An issuer also may not use any e-mail address provided by a 
shareholder solely to request a copy of proxy materials for any purpose 
other than to send a copy of those materials to that shareholder.\72\ 
The issuer also may not disclose a shareholder's e-mail address to any 
person other than the issuer's employee or agent to the extent 
necessary to send a copy of the proxy materials to a requesting 
shareholder.
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    \71\ Rule 14a-16(k)(1) [17 CFR 240.14a-16(k)(1)]. See Section 
II.A.1.b.iii of Release No. 34-55146 (Jan. 22, 2007) [72 FR 4148].
    \72\ Rule 14a-16(k)(2) [17 CFR 240.14a-16(k)(2)].

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[[Page 42227]]

3. Differences Between the Full Set Delivery Option and the Notice Only 
Option
    The full set delivery option varies from the notice only option in 
the following ways:
     An issuer may accompany the Notice with a copy of the 
proxy statement, annual report to security holders, if required by Rule 
14a-3(b),\73\ and a proxy card; \74\
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    \73\ The requirement in Exchange Act Rules 14a-3(b) and 14c-3(a) 
to furnish annual reports to security holders does not apply to 
registered investment companies [17 CFR 240.14a-3(b) and 240.14c-
3(a)]. A soliciting person other than the issuer also is not subject 
to this requirement. Finally, an issuer is required to provide such 
a report for shareholder meetings at which directors are to be 
elected.
    \74\ See new Rule 14a-16(n)(1).
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     An issuer need not prepare a separate Notice if the issuer 
incorporates all of the Notice information into the proxy statement and 
proxy card; \75\
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    \75\ See new Rule 14a-16(n)(2)(ii). See also footnote 58, above.
---------------------------------------------------------------------------

     Because the issuer already has provided shareholders with 
a full set of proxy materials, the issuer need not provide the 
shareholder with copies of the proxy materials upon request; \76\
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    \76\ See new Rule 14a-16(n)(3)(ii).
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     Because shareholders will not need extra time to request 
paper or e-mail copies, the issuer need not send the Notice and full 
set of proxy materials at least 40 days before the meeting date; \77\
---------------------------------------------------------------------------

    \77\ See new Rule 14a-16(n)(3)(i).
---------------------------------------------------------------------------

     Because the full set of proxy materials includes a proxy 
card or request for voting instructions, the issuer need not provide 
another means for voting at the time the Notice is provided unless it 
chooses to do so; and
     The issuer need not include the part of the prescribed 
legend relating to security holder requests for copies of the documents 
and instructions on how to request a copy of the proxy materials.\78\
---------------------------------------------------------------------------

    \78\ See new Rule 14a-16(n)(4).
---------------------------------------------------------------------------

a. Inclusion of a Full Set of Proxy Materials
    The notice only option does not permit an issuer to accompany the 
Notice with any other documents.\79\ In contrast, an issuer relying on 
the full set delivery option will deliver a full set of proxy 
materials, including a proxy statement, annual report to shareholders 
if required by Rule 14a-3(b), and a proxy card, along with the Notice. 
Under this option, when the Notice is initially sent, it must be 
accompanied by all of these documents, not just some of them. For 
example, an issuer may not send only the Notice and a proxy card to a 
shareholder as part of its initial distribution of proxy materials.\80\
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    \79\ Rule 14a-16(f)(1) [17 CFR 240.14a-16(f)(1)]. We note 
however, that under the notice only option, an issuer may send the 
Notice and proxy card together 10 days or more after it initially 
sends the Notice. See new Rule 14a-16(h)(1).
    \80\ However, it may send a reminder proxy card at any time 
after it initially sends the Notice accompanied by the full set of 
proxy materials. See new Rule 14a-16(h)(2).
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b. Request for Copies of the Proxy Materials
    As noted above, because an issuer relying on the full set delivery 
option will send shareholders copies of all of the proxy materials 
along with the Notice, there is no need for the issuer to provide these 
shareholders with a means to request a copy of the proxy materials. The 
issuer therefore may exclude information from the Notice on how a 
shareholder may request such copies.\81\
---------------------------------------------------------------------------

    \81\ See Rule 14a-16(n)(4).
---------------------------------------------------------------------------

c. 40-Day Deadline
    Under the full set delivery option, if an issuer or other 
soliciting person sends a full set of the proxy materials with the 
Notice, it need not comply with the 40-day deadline in Rule 14a-16 for 
sending the Notice. Thus, if an issuer is unable or unwilling to meet 
the 40-day deadline, it still may begin its solicitation after that 
deadline provided that it complies with the full set delivery option. 
Six commenters on the proposal questioned whether the proposal would 
have required all issuers to prepare their proxy materials at least 40 
days prior to the meeting.\82\ We have clarified that an issuer must 
comply with the 40-day period only if it intends to comply with the 
notice only option.\83\
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    \82\ See, for example, letters from Chamber of Commerce, CII, 
Commerce Financial Printers, Elmore & Allen, ICI, and STA.
    \83\ See Rule 14a-16(n)(3)(i).
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B. Implications of the Notice and Access Model for Intermediaries

    An issuer or other soliciting person must provide each intermediary 
with the information necessary to prepare the intermediary's Notice in 
sufficient time for the intermediary to prepare and send its Notice to 
beneficial owners within the timeframes of the model. An issuer that 
complies with the notice only option must provide the intermediary with 
the relevant information in sufficient time for the intermediary to 
prepare and send the Notice and post the proxy materials on the Web 
site at least 40 calendar days before the shareholder meeting date.\84\
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    \84\ If a soliciting person other than the issuer elects to 
follow the notice only option, the Notice must be sent to 
shareholders by the later of: (1) 40 calendar days prior to the 
security holder meeting date or, if no meeting is to be held, 40 
calendar days prior to the date the votes, consents, or 
authorizations may be used to effect the corporate action; or (2) 10 
calendar days after the date that the registrant first sends its 
proxy statement or Notice of Internet Availability of Proxy 
Materials to security holders. See Rule 14a-16(l)(2) [17 CFR 
240.14a-16(l)(2)].
---------------------------------------------------------------------------

    An issuer that complies with the full set delivery option need not 
comply with the 40-day deadline. The issuer need only provide the 
Notice information to the intermediary in sufficient time for the 
intermediary to prepare and send the Notice along with the full set of 
materials provided by the issuer. Under this option, as with the 
traditional method of delivering proxy materials, the intermediary must 
forward the issuer's full set of proxy materials to beneficial owners 
within five business days of receipt from the issuer or the issuer's 
agent.\85\
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    \85\ See Rule 14b-1(b)(2) [17 CFR 240.14b-1(b)(2)].
---------------------------------------------------------------------------

    The intermediary's Notice generally must contain the same types of 
information as an issuer's Notice, but must be tailored specifically 
for beneficial owners.\86\ With respect to beneficial owners who 
receive a Notice under the notice only option, the intermediary also 
must forward paper or e-mail copies of the proxy materials upon 
request, permit the beneficial owners to make a permanent election to 
receive paper or e-mail copies of the proxy materials, keep records of 
beneficial owner preferences, provide proxy materials in accordance 
with those preferences, and provide a means to access a request for 
voting instructions for its beneficial owner customers no later than 
the date the Notice is first sent.
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    \86\ For a more complete discussion of the content of the 
intermediary's Notice, see Section II.B.2 of Release No. 34-55146 
(Jan. 22, 2007) [72 FR 4148].
---------------------------------------------------------------------------

    When the issuer is delivering full sets of proxy materials to 
beneficial owners, the intermediary must either prepare a separate 
Notice and forward it with the full set of proxy materials, or 
incorporate any information required in the Notice, but not appearing 
in the issuer's proxy statement, in its request for voting 
instructions.

C. Reliance on the Notice and Access Model by Soliciting Persons Other 
Than the Issuer

    Under the amendments, a soliciting person other than the issuer 
also must comply with the notice and access model. Such a person may 
solicit proxies pursuant to the notice only option, the full set 
delivery option, or a combination of the two.\87\ Consistent

[[Page 42228]]

with the existing proxy rules and the voluntary model, the amendments 
treat such soliciting persons differently from the issuer in certain 
respects.
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    \87\ That is, as in the case of an issuer, a soliciting person 
other than the issuer may solicit some shareholders using the notice 
only option, while soliciting other shareholders using the full set 
delivery option.
---------------------------------------------------------------------------

    First, a soliciting person is not required to solicit every 
shareholder or to furnish an information statement to shareholders not 
being solicited. It may select the specific shareholders from whom it 
wishes to solicit proxies. For example, under the notice and access 
model, a soliciting person other than the issuer can choose to send 
Notices only to those shareholders who have not previously requested 
paper copies.\88\
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    \88\ Under Rule 14a-7(a)(2) [17 CFR 240.14a-7(a)(2)], an issuer 
is required to either mail the Notice on behalf of the soliciting 
person, in which case the soliciting person can request that the 
issuer send Notices only to shareholders who have not requested 
paper copies, or provide the soliciting person with a shareholder 
list, indicating which shareholders have requested paper copies. For 
a more complete discussion of the interaction of the model with Rule 
14a-7, see Section II.C.4 of Release No. 34-55146 (Jan. 22, 2007) 
[72 FR 4148].
---------------------------------------------------------------------------

    Second, if a soliciting person other than the issuer elects to 
follow the notice only option, it must send a Notice to shareholders by 
the later of:
     40 calendar days prior to the shareholder meeting date or, 
if no meeting is to be held, 40 calendar days prior to the date that 
votes, consents, or authorizations may be used to effect the corporate 
action; or
     10 calendar days after the date that the issuer first 
sends its proxy materials to shareholders.\89\

    \89\ Rule 14a-16(l)(2) [17 CFR 240.14a-16(l)(2)].
---------------------------------------------------------------------------

This timing requirement does not apply to a solicitation pursuant to 
the full set delivery model.
    If, at the time the Notice is sent, a soliciting person other than 
the issuer is not aware of all matters on the shareholder meeting 
agenda, the Notice must provide a clear and impartial identification of 
each separate matter to be acted upon at the meeting, to the extent 
known by the soliciting person.\90\ The soliciting person's Notice also 
must include a clear statement that there may be additional agenda 
items that the soliciting person is unaware of, and that the 
shareholder cannot direct a vote for those items on the soliciting 
person's proxy card provided at that time.\91\ If a soliciting person 
other than the issuer sends a proxy card that does not reference all 
matters that shareholders will act upon at the meeting, the Notice must 
clearly state whether execution of the proxy card would invalidate a 
shareholder's prior vote using the issuer's card on matters not 
presented on the soliciting person's proxy card.\92\
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    \90\ Rule 14a-16(l)(3)(i) [17 CFR 240.14a-16(l)(3)(i)].
    \91\ Id.
    \92\ Rule 14a-16(l)(3)(ii) [17 CFR 240.14a-16(l)(3)(ii)].
---------------------------------------------------------------------------

III. Clarifying Amendments

    Since adopting the notice and access model as a voluntary model, we 
have received several questions regarding implementation of that model. 
Some of these questions were received as comments on the proposing 
release to these amendments. To the extent such comments relate to the 
previously adopted voluntary model, the Commission's staff is working 
with those commenters to provide guidance regarding implementation of 
those rules. However, several comments indicated aspects of the adopted 
rules that we believe would benefit from clarification in the 
regulatory text. To help clarify our intent, we are adopting the 
following technical amendments.

A. No Requirement To Provide Recommendations

    Rule 14a-16(d)(3),\93\ as it was initially adopted under the 
voluntary notice and access model, required the Notice to contain ``[a] 
clear and impartial identification of each separate matter intended to 
be acted on and the soliciting person's recommendation regarding those 
matters.'' Our intent with this provision was not to require an issuer 
or other soliciting person to have a recommendation for every matter. 
Therefore, we are revising this provision to clarify that an issuer or 
other a soliciting person must present its recommendation only if it 
chooses to make a recommendation on a particular matter to be acted 
upon by shareholders.
---------------------------------------------------------------------------

    \93\ 17 CFR 240.14a-16(d)(3).
---------------------------------------------------------------------------

B. Deadline for Responding to Requests for Copies After the Meeting

    We are also amending the requirements about the fulfillment of 
requests for paper or e-mail copies received after the conclusion of 
the meeting. The rules that we initially adopted as part of the 
voluntary notice and access model made no distinction in the 
fulfillment requirements based on whether the issuer received a request 
for a paper or e-mail copy before or after the meeting date. We did 
state in the adopting release for the voluntary notice and access model 
that the post-meeting fulfillment provision is intended to require 
issuers to provide a copy of the proxy statement for one year ``[j]ust 
as the proxy rules require issuers to undertake in their proxy 
statements or annual reports to shareholders to provide copies of 
annual reports on Form 10-K for the most recent fiscal year to 
requesting shareholders.'' \94\ The rule relating to providing copies 
of the annual report on Form 10-ndash;K does not require the use of 
First Class mail or that the issuer respond within three business 
days.\95\ After the meeting is concluded, we do not believe there is 
such an urgent need to provide copies of the proxy materials in a 
timely manner to impose such requirements. Therefore, we are revising 
Rule 14a-16(j)(3) \96\ to clarify that, with respect to requests for 
copies received after the conclusion of the meeting, an issuer is not 
required to use First Class mail and is not required to respond within 
three business days.
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    \94\ See Release No. 33-55146 (Jan. 22, 2007) [72 FR 4148].
    \95\ See Rule 14a-3(b) [17 CFR 240.14a-3(b)].
    \96\ 17 CFR 240.14a-16(j)(3).
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C. Item 4 of Schedule 14A

    Item 4 of Schedule 14A \97\ requires that an issuer or other 
soliciting person describe the methods used for soliciting proxies if 
not using the mails. Because the amendments require issuers and other 
soliciting persons to comply with Rule 14a-16 with respect to all proxy 
solicitations not related to business combination transactions, we are 
revising this item to clarify that issuers and other soliciting persons 
need not describe the notice and access model when they are using it to 
solicit proxies.
---------------------------------------------------------------------------

    \97\ 17 CFR 240.14a-101.
---------------------------------------------------------------------------

IV. Compliance Dates

    Large accelerated filers, not including registered investment 
companies, must comply with the amendments with respect to 
solicitations commencing on or after January 1, 2008. Registered 
investment companies, soliciting persons other than the issuer, and 
issuers that are not large accelerated filers conducting proxy 
solicitations (1) may comply with the amendments for solicitations 
commencing on or after January 1, 2008 and (2) must comply with the 
notice and access model for solicitations commencing on or after 
January 1, 2009. For example, a soliciting person other than the issuer 
that is soliciting proxies with respect to a shareholder meeting of a 
large accelerated filer is not required to follow the notice and access 
model until January 1, 2009, even though the large accelerated filer 
would be required to follow the model. However, such a soliciting 
person may voluntarily follow the model.
    As stated above, the primary concern of most commenters on the 
proposal was the Commission's aggressive

[[Page 42229]]

timetable for adopting the proposed rules. All 14 commenters on this 
topic requested that the Commission delay adoption of the proposed 
rules.\98\ This group of commenters included trade associations 
representing issuers, transfer agents, intermediaries, proxy 
distribution service providers, institutional investors, and other 
shareholders.
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    \98\ See letters from AARP, ABC, ADP, BONY, Chamber of Commerce, 
CII, Computershare, ICI, Reed Smith, Registrar and Transfer, SCSGP, 
SIFMA, SSA, and STA.
---------------------------------------------------------------------------

    Eight of these commenters were concerned that the short period 
between effectiveness of the voluntary model and adoption of the 
amendments in this release would not permit the Commission and the 
industry to properly evaluate the results of the voluntary model and 
prepare an adequate cost-benefit analysis.\99\ Data that the commenters 
felt would be important to capture regarding the voluntary model 
included: (1) The effect on voter participation; (2) the costs of 
implementing the model; and (3) the extent to which predicted savings 
are actually realized by companies and other soliciting persons. These 
commenters recommended that the Commission not adopt the proposed 
amendments until it has had the opportunity to assess the data received 
regarding companies' experiences with the voluntary model.
---------------------------------------------------------------------------

    \99\ See letters from Chamber of Commerce, BONY, ICI, Reed 
Smith, Registrar and Transfer, SCSGP, SIMFA, and STA.
---------------------------------------------------------------------------

    With respect to costs, three of these commenters were concerned 
regarding the cost of adopting rules that would require issuers to 
develop, or hire outside services to develop, an Internet voting 
platform.\100\ The rules that we are adopting do not require, and the 
proposals would not have required, such an Internet voting platform. 
Similarly, five commenters raised concerns regarding the ability of 
issuers to prepare their proxy mat