October 29, 2006
New NYSE rule 452
The new NYSE Rule 452 disabling default proxies for brokers holding stock for clients has a broad reach. The rule applies to all NYSE "members", most of the financial community, and applies to all listed and unlisted securities. It includes stock not listed on the NYSE. NASDAQ, for example, could have a different rule and it would not matter; most NYSE members also trade on NASDAQ. The mandatory nature of the rule and its scope is its problem. The SEC should at the very least, limit the rule to NYSE listed stock. It should also find a way to allow, at the minimum, sophisticated investors to opt out in arrangements with their brokers. This rule is far to broad.
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I'm curious: Why do you regard it as a problem? How can the election of directors ever be considered "routine"?
Posted by: Mark Cobley | Nov 1, 2006 8:44:52 AM