Chris Kentouris does a good job of explaining Kenneth Altman’s proposal to supplement the system of NOBOs and OBOs now used by banks and brokerages with an “all beneficial owners” (ABO) system. Under this approach, companies who have issued stock to the public would know exactly who their beneficial shareholders are at limited times during the year, such as before annual meetings or during a proxy contest.

Identifying who owns shares in their company is certainly more important in 2010 with the revision of Rule 452 preventing brokers votes and because under notice-and-access only 4.03% of retail accounts using e-proxy voted their shares.

Altman wants Broadridge and other proxy distributors to make their lists available to issuers who could do their own mailings, use their transfer agents, or use a proxy distributor such as Broadridge, Mediant Communications or Inveshare. (The New ABO’s of Proxy Communications, Securities Industry News, 1/4/2010)

While Altman’s proposal would reduce “empty voting,” and bring shareowners closer to issuers, it wouldn’t help shareowner activists communicate with each other nor would it address the legal glitches that have arisen because ownership of immobilized shares in “street name” places the rights of shareowners in jeopardy. (see Investors Against Genocide Fighting American Funds, Broadridge and Vague SEC Requirements: More Problems Solved Using Direct Registration, CorpGov.net, 11/25/09) We hope to have a better proposal within the next couple of weeks.