“While the legislative analysis of the Bill indicates the changes are intended to modernize the

Florida Unclaimed Property statute, the Bill actually rejects many modern developments

adopted by shareholders,” the associations wrote.

Specifically, SSA and STA specifically noted:

• Language that would exclude automatic deposits, withdrawals and reinvestments from being considered actions that signify owner activity sufficient to affect account dormancy.
• Conflicting provisions that simultaneously include “unmatured debt” as a property type subject to escheatment, while noting that “property shall be considered payable or distributable once the holder's obligation to pay or deliver the property arises.”

“We recognize that the escheatment of securities can be complex, as investments are intended to be held passively for long periods. Escheatment is also complicated due to the interaction of federal securities law,” SSA and STA wrote. “Our members would therefore welcome the opportunity to work with you to accomplish your goals of ensuring that all property that is truly abandoned is timely escheated after proper notice, without risking loss to Florida shareholders, many of whom are counting on these investments for their retirement.

View the SSA/STA comments.

For more information, including event details, registration updates, and future announcements, please visit the event page:
https://www.shareholderservices.org/events/EventDetails.aspx?id=2011408

Keith represents companies and individuals in appeals before federal and state courts and has argued before appeals courts across the country. He specializes in challenges to regulatory policy and has achieved significant results in litigation across a spectrum of agencies, including the Securities and Exchange Commission, Environmental Protection Agency, Health and Human Services, Department of Energy and more.

The SSA 2025 Annual Conference will be held July 20-22 at the Limelight Hotel in Denver. Register today and watch for more agenda announcements to come.

Computershare’s video series includes eight videos:

• Introduction and welcome
• What assets could become escheated?
• A real-life story of escheatment
• The importance of contact
• Keeping your stock accounts active
• Keeping your bank accounts active
• Common misconceptions
• Can a state really sell my shares?

View the Keep What’s Yours video series from Computershare and share it with friends and family!

“Our federal securities laws lay out a basic bargain. Investors get to decide which risks they want to take so long as companies raising money from the public make what President Franklin Roosevelt called ‘complete and truthful disclosure,’” said SEC Chair Gary Gensler. “Over the last 90 years, the SEC has updated, from time to time, the disclosure requirements underlying that basic bargain and, when necessary, provided guidance with respect to those disclosure requirements.”

Chair Gensler added, “These final rules build on past requirements by mandating material climate risk disclosures by public companies and in public offerings. The rules will provide investors with consistent, comparable, and decision-useful information, and issuers with clear reporting requirements. Further, they will provide specificity on what companies must disclose, which will produce more useful information than what investors see today. They will also require that climate risk disclosures be included in a company’s SEC filings, such as annual reports and registration statements rather than on company websites, which will help make them more reliable.”

Specifically, the final rules will require a registrant to disclose:

• Climate-related risks that have had or are reasonably likely to have a material impact on the registrant’s business strategy, results of operations, or financial condition
• The actual and potential material impacts of any identified climate-related risks on the registrant’s strategy, business model, and outlook
• If, as part of its strategy, a registrant has undertaken activities to mitigate or adapt to a material climate-related risk, a quantitative and qualitative description of material expenditures incurred and material impacts on financial estimates and assumptions that directly result from such mitigation or adaptation activities
• Specified disclosures regarding a registrant’s activities, if any, to mitigate or adapt to a material climate-related risk including the use, if any, of transition plans, scenario analysis, or internal carbon prices
• Any oversight by the board of directors of climate-related risks and any role by management in assessing and managing the registrant’s material climate-related risks
• Any processes the registrant has for identifying, assessing, and managing material climate-related risks and, if the registrant is managing those risks, whether and how any such processes are integrated into the registrant’s overall risk management system or processes
• Information about a registrant’s climate-related targets or goals, if any, that have materially affected or are reasonably likely to materially affect the registrant’s business, results of operations, or financial condition. Disclosures would include material expenditures and material impacts on financial estimates and assumptions as a direct result of the target or goal or actions taken to make progress toward meeting such target or goal
• For large, accelerated filers (LAFs) and accelerated filers (AFs) that are not otherwise exempted, information about material Scope 1 emissions and/or Scope 2 emissions;
• For those required to disclose Scope 1 and/or Scope 2 emissions, an assurance report at the limited assurance level, which, for an LAF, following an additional transition period, will be at the reasonable assurance level
• The capitalized costs, expenditures expensed, charges, and losses incurred as a result of severe weather events and other natural conditions, such as hurricanes, tornadoes, flooding, drought, wildfires, extreme temperatures, and sea level rise, subject to applicable one percent and de minimis disclosure thresholds, disclosed in a note to the financial statements
• The capitalized costs, expenditures expensed, and losses related to carbon offsets and renewable energy credits or certificates (RECs) if used as a material component of a registrant’s plans to achieve its disclosed climate-related targets or goals, disclosed in a note to the financial statements; and
• If the estimates and assumptions a registrant uses to produce the financial statements were materially impacted by risks and uncertainties associated with severe weather events and other natural conditions or any disclosed climate-related targets or transition plans, a qualitative description of how the development of such estimates and assumptions was impacted, disclosed in a note to the financial statements.

Before adopting the final rules, the Commission considered more than 24,000 comment letters, including more than 4,500 unique letters, submitted in response to the rules’ proposing release issued in March 2022.

The adopting release is published on SEC.gov and will be published in the Federal Register. The final rules will become effective 60 days following publication of the adopting release in the Federal Register, and compliance dates for the rules will be phased in for all registrants, with the compliance date dependent on the registrant’s filer status.

The reader’s funds originated from an investment account set up by a family friend when she was a child. She followed the common advice to leave the investment alone rather than acting on short-term market conditions. That way, the funds would grow and be available when she needed them. Over time, she quit paying attention to the account, it became dormant and the funds, totaling more than $52,000, were escheated to the state of New York. However, upon laying claim to the funds, the claimant received a check for only $7,000.

The column highlights how an error by the investment firm’s transfer agent when reporting the funds to New York led to the reduced balance; how the columnist believes the investment firm could have tracked down the account owner; how she eventually received the entire account balance plus subsequent earnings, totaling $115,000; how consumers can avoid losing track of their accounts; and how to claim unclaimed property.

View the NYT article (subscription may be needed).

Affected exemptions include conditional temporary relief to:

• Transfer agents from the requirements of Sections 17A and 17(f)(1) of the Exchange Act, as well as Rules 17Ad-1 through 17Ad-11, 17Ad-13 through 17Ad-20, and 17f-1 thereunder.
• Transfer agents and other persons, including broker-dealers, subject to such requirements, from the requirements of Section 17(f)(2) of the Exchange Act and Rule 17f-2 thereunder (the “Fingerprinting Exempted Provisions”).

View the SEC announcement for complete details.

“H.B. 305 significantly increases the protections afforded to shareholders while simultaneously reinforcing the fundamental purpose of the Maryland Disposition of Abandoned Property Act – namely, the safekeeping of unclaimed property and the return of such property to its rightful owner,” the organizations wrote. “The bill sets forth a presumption of abandonment that only deems securities (or other intangible property held by a banking or financial organization or business association) unclaimed if the holder does not have a valid address for the owner of the property for at least three years. As such, H.B. 305 seeks to prevent the escheatment of assets that are not truly abandoned or unclaimed.”

SSA and STA also support the bill for its consistency with dormancy triggers contained in the Revised Uniform Unclaimed Property Act, which has not been enacted in Maryland. The state’s current law is inconsistent with RUUPA and allows for the escheatment of securities based on a lack of owner-initiated contact with the holder. This can result in property being escheated simply because owners have adopted a “buy and hold” strategy.

Both houses of the Maryland legislature have passed H.B. 305, which now awaits the governor’s approval.  

View the SSA/STA letter.

The recently updated section covers shareholder proposals:

Presentation of Shareholder Proposals

Exchange Act Rule 14a-8(h) requires shareholder proponents, or their representatives, to appear and present their proposals at the annual meeting. In light of the possible difficulties for shareholder proponents to attend annual meetings in person to present their proposals, the staff encourages issuers, to the extent feasible under state law, to provide shareholder proponents or their representatives with the ability to present their proposals through alternative means, such as by phone, during the 2020, 2021, and 2022 proxy seasons.

Furthermore, to the extent a shareholder proponent or representative is not able to attend the annual meeting and present the proposal due to the inability to travel or other hardships related to COVID-19, the staff would consider this to be “good cause” under Rule 14a-8(h) should issuers assert Rule 14a-8(h)(3) as a basis to exclude a proposal submitted by the shareholder proponent for any meetings held in the following two calendar years.

See the SEC’s complete guidance.

"Over the past two decades, we’ve heard concerns about and seen gaps in Rule 10b5-1 — gaps that today's proposals would help fill," said SEC Chair Gary Gensler. "These issues speak to the confidence that investors have in the markets. Anytime we can increase investor confidence in the markets, that’s a good thing. It helps investors deciding where to put their money. It lowers the cost of capital for businesses seeking to raise capital, grow, and innovate, and thus facilitates capital formation. I’m pleased to support today’s proposal and, subject to Commission approval, look forward to the public’s feedback."

The proposed amendments to Rule 10b5-1 would update the requirements for the affirmative defense, including imposing a cooling off period before trading could commence under a plan, prohibiting overlapping trading plans, and limiting single-trade plans to one trading plan per 12-month period. In addition, the proposed rules would require directors and officers to furnish written certifications that they are not aware of any material nonpublic information when they enter into the plans and expand the existing good faith requirement for trading under Rule 10b5-1 plans.

The amendments also would elicit more comprehensive disclosure about issuers’ policies and procedures related to insider trading and their practices around the timing of options grants and the release of material nonpublic information. A new table would report any options granted within 14 days of the release of material nonpublic information and the market price of the underlying securities the trading day before and the trading day after the disclosure of the material non-public information. Insiders that report on Forms 4 or 5 would have to indicate via a new checkbox whether the reported transactions were made pursuant to a Rule 10b5-1(c) or other trading plan. Finally, gifts of securities that were previously permitted to be reported on Form 5 would be required to be reported on Form 4.

Collectively, these proposed amendments aim to address critical gaps in the SEC’s insider trading regime and to help shareholders understand when and how insiders are trading in securities for which they may at times have material nonpublic information.

The proposing release will be published on SEC.gov and in the Federal Register. The comment period will remain open for 45 days after publication in the Federal Register.

View the proposed rule and SEC fact sheet.

"Share buybacks have become a significant component of how public issuers return capital to shareholders," said SEC Chair Gary Gensler. "I think we can lessen the information asymmetries between issuers and investors through enhanced timeliness and granularity of disclosures that today’s proposal would provide."

The proposed rules would require an issuer to provide a new Form SR before the end of the first business day following the day the issuer executes a share repurchase. Form SR would require disclosure identifying the class of securities purchased, the total amount purchased, the average price paid, as well as the aggregate total amount purchased on the open market in reliance on the safe harbor in Exchange Act Rule 10b-18 or pursuant to a plan that is intended to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c).

The proposed amendments also would enhance existing periodic disclosure requirements regarding repurchases of an issuer’s equity securities. Specifically, the proposed amendments would require an issuer to disclose: the objective or rationale for the share repurchases and the process or criteria used to determine the repurchase amounts; any policies and procedures relating to purchases and sales of the issuer’s securities by its officers and directors during a repurchase program, including any restriction on such transactions; and whether the issuer is making its repurchases  pursuant to a plan that it intends to satisfy the affirmative defense conditions of Exchange Act Rule 10b5-1(c) and/or  the conditions of the Exchange Act Rule 10b-18 non-exclusive safe harbor.

The proposed rules apply to issuers that repurchase securities registered under Section 12 of the Securities Exchange Act of 1934, including foreign private issuers and certain registered closed-end funds.

The proposing release will be published on SEC.gov and in the Federal Register. The comment period will remain open for 45 days after publication in the Federal Register.

View the proposed rule and the SEC’s fact sheet.

"These amendments address concerns that shareholders voting by proxy cannot vote for a mix of dissident and registrant nominees in an election contest, as they could if voted in person," said SEC Chair Gary Gensler. "Today’s amendments will put these candidates on the same ballot. They will put investors voting in person and by proxy on equal footing. This is an important aspect of shareholder democracy."

The final rules will require dissident shareholders and registrants to provide shareholders with a proxy card that includes the names of all registrant and dissident nominees. The rules will apply to all non-exempt solicitations for contested elections other than those involving registered investment companies and business development companies. The rules will require registrants and dissidents to provide each other with notice of the names of their nominees, establish a filing deadline and a minimum solicitation requirement for dissidents, and prescribe presentation and formatting requirements for universal proxy cards.

To further facilitate shareholder voting in director elections, the Commission also voted to adopt amendments to the proxy rules to ensure that proxy cards clearly specify the applicable shareholder voting options in all director elections and to require proxy statements to disclose the effect of a shareholder’s election to withhold its vote.

The final rules will be published in the Federal Register. To facilitate transition to the new rules, compliance with the rules related to universal proxy cards will be required for any shareholder meeting involving contested director election held after Aug. 31, 2022.

View the final rule and an SEC fact sheet. 

"Proxy advice voting businesses play an important role in the proxy process. Their clients deserve to receive independent proxy voting advice in a timely manner," said Chair Gary Gensler. "I am pleased to release these proposals to the public and encourage the public to share their feedback at sec.gov."

The proposed amendments would rescind two rules applicable to proxy voting advice businesses that the Commission adopted in 2020. Specifically, the Commission is proposing to rescind conditions to the availability of two exemptions from the proxy rules’ informational and filing requirements on which proxy voting advice businesses often rely. Those conditions require that:

1. Registrants that are the subject of proxy voting advice have such advice made available to them in a timely manner. 
2. Clients of proxy voting advice businesses are provided with a means of becoming aware of any written responses by registrants to proxy voting advice.

Investors and others have expressed concerns that these conditions will impose increased compliance costs on proxy voting advice businesses and impair the independence and timeliness of their proxy voting advice.

The proposed amendments also would rescind the 2020 changes made to the proxy rules’ liability provision. Although the changes were intended to make clear that proxy voting advice is subject to liability under the proxy rules, investors and others have expressed concerns that the 2020 changes have created confusion, increased proxy voting advice businesses’ litigation risks, and potentially impair the independence and quality of the proxy voting advice. 

The proposal will have a 30-day public comment period following its publication in the Federal Register.

View the proposed rules and an SEC fact sheet. 

Nicole is manager of shareholder operations within Duke Energy Corporation’s Investor Relations Department. She began her career in shareholder services on the telephone, answering shareholder inquiries. Since then, she has served multiple roles within Shareholder Servicers, providing support to Duke Energy’s in-house transfer agent function. During her 20-year tenure, Duke Energy underwent several significant corporate actions, including three mergers, a reverse stock split, and a spin-off.

Larry is the vice president and head of shareholder services at Brighthouse Financial. He is responsible for defining the strategy, providing oversight and managing shareholder services, in addition to leading high-profile initiatives within Treasury. Before his current role at Brighthouse, Larry was responsible for working on the spin-off of Brighthouse Financial from MetLife. Before joining the insurance industry, he had a 25-year banking career at HSBC, National Australia Bank and J.P. Morgan Chase, primarily focused on developing financial solutions for global insurers.

Congratulations, Nicole and Larry, on your new leadership positions.

SSA is driven by the dedication of volunteers like Nicole and Larry. During her farewell comments at the 2021 SSA Annual Conference, Kim Hanlon encouraged SSA members to get involved in the association’s committees and board.

“Getting involved can be so rewarding, allowing you to grow personally and professionally while also giving back to the SSA community and your peers,” she said.

If you’re interested in heeding Kim’s call, please contact SSA Executive Director Tanya Guy at tguy@shareholderservices.org or (763) 253-4347 to discuss volunteer opportunities that might be a good fit for you. 

In a September 2020 letter to NAUPA, SSA and STA outlined the challenges presented by the recent COVID-19 pandemic disruption and other events, such as natural disasters, that have periodically affected due diligence and reporting mailings. The organizations requested that the NAUPA board take action to help the states and property holders when these unplanned scenarios arise. NAUPA denied the request.

In its latest request for action, SSA and SST explained that their members have been forced to make a “no-win” decision between reporting property with foreign addresses without sending due diligence or to simply withhold the property from their reports. The letter encourages NAUPA to pass a resolution that encourages states to take a reasonable course of actions.

“A resolution from NAUPA would assist the states in understanding the impossible choice of holders due to no fault of their own and could encourage the states from imposing interest and penalties,” the organizations wrote. “We respectfully request the NAUPA board consider passing a resolution such as the following:

When state-required due diligence cannot be performed due to mail disruptions, it is permissible for the owner’s property to be held until the next reporting cycle in which mail can be resumed. Once restrictions are no longer in place, the state-required due diligence would be performed in the normal course of the next reporting cycle. Any property thereafter reported would not be considered late and would therefore not be subject to interest and penalties.”

View the Feb. 3, 2021, letter.

Stakeholders, including SSA, raised these concerns to the National Association of Unclaimed Property Administrators, which in turn surveyed its members in May 2020. Questions included:

• Would your state agree that “no accounts be escheated for shareholders whose address is in an impacted country until the restrictions are lifted and at least one mailing to the owner has been successful”?
• Would your state agree that “shareholders whose mail is returned by the post office due to a service suspension should not be deemed to be lost”?
• Would your state agree that “request a waiver of interest and penalties for any property that is considered late due to this mail issue”?

Responding states included: Arizona, Colorado, Connecticut, District of Columbia, Florida, Idaho, Indiana, Michigan, Missouri, New Mexico, Oklahoma, Oregon, South Carolina, South Dakota, Vermont, Virginia, Washington, Wisconsin and Wyoming.

View the state administrator survey responses

Although some countries have relaxed their restrictions since the state survey was conducted, the issue continues to pose challenges for unclaimed property holders as spring reporting deadlines approach.

Thank you to NAUPA for conducting this survey and allowing SSA to share the information with members.

The full press release can be found here.

View the report.

SR-NYSE-2020-96 proposes to amend NYSE rules establishing maximum fee rates to be charged by member organizations. View the filing.

SR-NYSE-2020-98 proposes to amend NYSE rules to prohibit member organizations from seeking reimbursement from issuers for forwarding proxy and other materials to beneficial owners who received shares from their broker. View the filing.

A requirement by some states, including Delaware, mandates that publicly traded companies provide shareholders the opportunity to inspect a list of all shareholders. Under normal circumstances, companies could make their lists available for viewing in a controlled space at their headquarters. In today’s socially distant world, however, companies may need an online solution that provides the same ability to view the list while still maintaining control and security. This is one scenario where a virtual data room can help.

A virtual data room gives companies the ability to securely share critical content with their remote teams. They can provide:

• A secure, password-protected platform for document access.
• A convenient way to individually invite each user requesting access.
• The ability to disable print, save and search rights.
• A strong audit trail to track user access.
• A way to automatically expire user access on a specific date and time.

With many business teams working from home, virtual data rooms also provide a useful platform for collaboratively handling sensitive documents, like contracts, as well. Such systems allow for managed permissions, giving only approved employees access to specific documents and folders. They also can harness the power of artificial intelligence to search for and redact specific words and terms.

As more regulations focus on cyber security and data privacy, maintaining systems and tools to comply will be vital. Virtual data rooms may offer the right solution for companies and employees needing to provide shareholders, stakeholders and team members with access to sensitive information online.

SSA’s upcoming Virtual Data Rooms webinar will offer attendees greater insight into how these technology tools help corporate professionals understand their liability and empower them to minimize it immediately. Join Rick Wood and Ron Schneider from Donnelley Financial Solutions (DFIN) along with Ashley Lydon from Univar Solutions on Nov. 10 at 2 p.m. EST for this insightful discussion about how virtual data rooms can drive value.

Register today. 

With the amendments, the commission seeks to help ensure that the ability to have a proposal included alongside management’s in a company’s proxy materials is appropriately calibrated and takes into consideration the interests of the shareholder who submits the proposal, the company and other shareholders who bear the costs associated with the inclusion of such proposals in the company’s proxy statement.

Under the rules, any shareholder may submit an initial proposal after having held $2,000 of company stock for at least three years, or higher amounts for shorter periods of time. The rules also provide for a transition period so that shareholders who are currently eligible at the $2,000 threshold will remain eligible to submit a proposal for inclusion in the company’s proxy statement so long as they continue to maintain at least their current holdings through the date of submission and the date of the relevant meeting. 

The amendments will be effective 60 days after publication in the Federal Register, and the final amendments will apply to any proposal submitted for an annual or special meeting to be held on or after Jan. 1, 2022. The final rules also provide for a transition period with respect to the ownership thresholds that will allow shareholders meeting specified conditions to rely on the $2,000/one-year ownership threshold for proposals submitted for an annual or special meeting to be held prior to Jan. 1, 2023.

See the SEC’s complete announcement and final rule.

Register Today.

SSA and SST explained that, mail disruptions increase the risk of states liquidating escheated property without the owners receiving due diligence letters previously mailed by holders. This not only harms the property owner, but also opens the states, issuers and transfer agents to claims and litigation for large market losses.  

“If due diligence is not possible, there should be a means to delay potential escheatment and shares should not be reported and remitted/delivered until after a successful mailing can occur,” the organizations wrote.

SSA and STA requested that the NAUPA board consider a resolution specifying that when state-required due diligence cannot be performed due to mail disruptions, it is permissible for the owner’s property to be held until the next reporting cycle. Assuming any restrictions are no longer in place at the next annual reporting period, the state-required due diligence would be performed in the normal course of the next reporting cycle. If the property is then not claimed by the owner, it would be reported and remitted/delivered to the appropriate jurisdiction.

View the letter.

Register today.