SEC Adopts Electronic Forums, Bank Deregulation Rises, and Trends in Executive Benefits

SEC Adopts Electronic Forums

The Securities and Exchange Commission (SEC) has adopted amendments to the federal proxy rules under the Securities Exchange Act of 1934 to facilitate the use of electronic shareholder forums. The SEC expects the amendments to open up new avenues for more efficient communication among shareholders themselves, as well as between shareholders and the companies they own.

u00e2u20acu0153[This] action is intended to tap the potential of technology to help shareholders communicate with one another and express their concerns to companies in ways that could be more effective and less expensive,u00e2u20ac says SEC Chairman Christopher Cox. u00e2u20acu0153The rule amendments are intended to remove legal concerns, such as the risk that discussion in an online forum might be viewed as a proxy solicitation, that might deter shareholders and companies from using this new technology.u00e2u20ac

Specifically, the amendments will clarify that participation in an electronic shareholder forum, which could potentially constitute a solicitation subject to the current proxy rules, will be exempt from most of the proxy rules if certain conditions to the exemption are satisfied.

In addition, the amendments provide that a shareholder, company, or third party acting on behalf of a shareholder or a company that establishes, maintains, or operates an electronic shareholder forum will not be liable under the federal securities laws for statements or information provided by another person participating in the forum.

Waving the Deregulation Banner

In a letter to the Treasury Department, the Independent Community Bankers of America (ICBA) is once again calling on the government to reduce regulatory burden to enhance competitiveness rather than restructure the nation’s bank regulatory system. The department is currently reviewing the financial institutions regulatory structure and plans to release its recommendations early in 2008.

u00e2u20acu0153The goals of competitive capital markets and an efficient regulatory system are important ones that ICBA supports,u00e2u20ac said Karen Thomas, ICBA executive vice president and director of government affairs. u00e2u20acu0153But from the community bank point of view, the problem is not that we have too many regulators, it’s that we have too many regulations. Meaningful regulatory relief would go a longer way toward enhancing the competitiveness of community banks than would reform of the bank regulatory structure.”

ICBA also made the following points in its letter:

u00e2u20acu00a2 A monolithic federal regulator would be dangerous and unwise. The success of the nationu00e2u20acu2122s diverse financial system is due to its innovative regulatory structure with multiple regulators that provide checks and balances on each other.

u00e2u20acu00a2 Multiple charters financial institutions can choose from are essential for maintaining an innovative and resilient regulatory system.

u00e2u20acu00a2 The Office of the Comptroller of the Currency and the Office of Thrift Supervision should remain separate.

u00e2u20acu00a2 The states play an important
role in supervising the institutions chartered under state authority
and the dual banking system should be maintained.

The ICBA maintains that while the lines distinguishing state and federally chartered banks have blurred in the last 20 years, community banks value the productive tension between state and federal regulators. One of the distinct advantages of the current dual banking system is that it ensures community banks have a choice of charters and the supervisory authority that oversees their operations, ICBA says.

u00e2u20acu0153Community banks play a vital role in the economic well being of countless individuals, neighborhoods, businesses, organizations, and communities throughout the country and are the key sources of credit to small businesses, the job-creating sector of our economy,u00e2u20ac says Thomas. u00e2u20acu0153Public policy should promote the competitiveness and efficiency of community banks and support and encourage a diverse financial system.u00e2u20ac

Trends in Executive Benefits

Clark Consultingu00e2u20acu2122s 13th Executive Benefits Survey, which examines data and trends among executive benefit plans, with an emphasis on nonqualified deferred compensation (NQDC) plans and supplemental executive retirement plans (SERPs), reveals that NQDC plans continue to be widely utilized and a growing number of companies (nearly three-quarters) are choosing corporate-owned life insurance (COLI) to informally fund these programs. NQDCs and SERPS are tools often used by top corporations to attract and retain sought-after executive talent.

NQDC plan prevalence is the highest it has been since the surveyu00e2u20acu2122s inception in 1993 according to the survey. Corporate matching contributions to NQDC plans were reported by 56% of respondents. Of those respondents, 51% utilize a 401(k) restoration match formula.

SERP prevalence was lower overall among the 18% of Fortune 1000 companies surveyed; but it remains high among financial institutions (82% indicated they have adopted a SERP).

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