Our Glossary

Affidavit of Mailing: A notarized document stating mail dates to assure the client that a mailing has been completed in compliance with SEC regulations.

Annual Meeting: A meeting held once a year to elect board directors and transact business that requires shareholder approval. The chief executive officer reports to shareholders the year’s results and outlook for the coming year. Outside the U.S., an annual meeting is referred to as an annual general meeting.

Annual Report: An annual publication that a public company must provide to shareholders describing the company’s financial condition and how it operates.

Ballot: A device used to cast votes.

Beneficial Owner: An investor who is not a registered holder of shares and whose ownership is through a securities entitlement in an intermediary/broker account. A beneficial owner typically has voting rights.

Board of Directors: A group of individuals who are responsible for overseeing a corporation’s management and operations.

Board of Trustees: A group of individuals named to manage a non-stock corporation, i.e., mutual fund, mutual savings bank or foundation.

Broker: A general term meaning either a brokerage firm or an individual stockbroker. Brokerage firms, or broker-dealers, are registered with the Securities and Exchange Commission (SEC) to buy and sell securities on behalf of clients of the firm, as well as for the firm’s own accounts.

Broker-dealer: A brokerage firm that is licensed to handle securities transactions on behalf of its customers and for its own account.

Cede and Company (aka Cede and Co. or Cede & Co.): A specialist U.S. financial institution that processes transfers of stock certificates on behalf of Depository Trust Company.

Certificate of Tabulation: The Inspector of Election for a company’s shareholder meeting attests to the manner and validity of data collected at the end of the meeting.

Class Action: A class action, class suit or representative action is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member of that group.

Common stock: A security that represents ownership in a corporation.

Contested proposal: A proposal submitted by a shareholder that takes a position different from the corresponding position taken by management, such as nominees to the board of directors.

Control number: A one-time use number used to identify shareholders who vote by proxy online or over the telephone, which distinguishes individual shareholders for voting purposes.

Cumulative Voting: A system of voting in which each voter is given as many votes as there are positions to be filled and allowed to cast those votes for one candidate or to distribute them in any way they choose among the candidates.

CUSIP: A 9-digit alphanumeric security identifier issued to stocks and registered bonds in the United States and Canada for the purposes of facilitating clearance and settlement of trades.

Custodian: A financial institution that holds securities for another person or entity.

Depository Trust Company (DTC): The leading security depository in the United States.

Direct registration: One of the ways in which shareholders may choose to hold their securities. With this option, the shareholder’s name is recorded electronically on the issuer’s books.

Discretionary voting: NYSE Rule 452 gives brokers discretionary voting rights. Under the rule, brokers may vote their clients’ shares if the client hasn’t given specific voting instructions 10 days prior to a shareholder meeting, provided that the proxy material is transmitted to the client at least 15 days before the meeting.

Dividend: A share of a company’s profits paid to shareholders at the discretion of the board of directors.

Echo Voting: Also called mirror or proportional voting, this practice refers to when a broker votes shares in the same proportion as the vote of all of the other holders of the fund’s shares.

E-Consent: A shareholder’s request to receive shareholder communications electronically or online.

Fiduciary: A person or entity that assumes responsibility for managing assets for and acting in the best interests of another individual or entity, typically known as the beneficiary.

Financial Industry Regulatory Authority (FINRA): An independent, non-governmental corporation that writes and enforces the rules governing registered brokers and broker-dealer firms in the United States.

Holder of Record: Owner of a company’s securities as recorded on the books of the issuing company or its transfer agent as of a particular date.

Householding: Rule that allows companies and mutual funds to make delivery of a single prospectus, annual and semi-annual report, and proxy information to multiple investors who reside at the same address.

Inspector of Elections: An official responsible for ensuring that elections are conducted in an open and honest manner and determining that ballots are properly cast.

Issuer: A legal entity that registers and sells securities for the purpose of financing its operations. A publicly traded company is an issuer of securities.

Mandatory Corporate Action: An event initiated by a corporation’s board of directors that affects all shareholders, such as a cash dividend, stock split, merger, pre-refunding, return of capital, bonus issue, asset ID change, and spin-off.

Meeting Date: The date on which a proposed meeting is scheduled; in the context of this glossary, a corporate annual meeting or special meeting.

Nominee Name: The name under which a security is registered and held in trust for a beneficial owner.

Non-Objecting Beneficial Owner (NOBO): A security holder who has given permission to a financial intermediary to release the owner’s name and address to the company or issuer in which they have purchased securities.

Non-Routine Proposal: These typically involve contests or matters that may substantially affect the rights or privileges of shareholders.

Notice and Access (NAA or N&A): The SEC’s “Internet Availability of Proxy Materials” rule. Pursuant to the SEC’s proxy rules, a company may, but is not required to, furnish proxy materials to shareholders through a “notice and access” model.

Objecting Beneficial Owner (OBO): A beneficial security holder who does not give permission to a financial intermediary to release the owner’s name and address to a company issuer that he or she has invested in for the purpose of receiving proxy mailings and shareholder communications.

Omnibus Proxy: A list issued by depositories detailing their participants and their holdings and authorizing the participants to vote their proxies directly.

Proposals for Meeting: Issues covered in a proxy statement (i.e., election of board of directors, information on directors’ salaries, option plans for directors, and any declarations made by company management).

Proportional Voting: A situation where brokers exercise their authority to vote any uninstructed shares of beneficial owners in the same proportion as instructed shares, with no minimum amount of instructed shares required. This applies to routine proposals only.

Prospectus: A legal document issued by companies that are offering securities for sale. When provided to prospective mutual fund investors, a prospectus includes a description of the fund’s strategies, fee structure and financial statements, and the manager’s background.

Proxy: An agent legally authorized to act on behalf of another party.

Proxy Ballot: The form used to vote at a shareholder meeting.

Proxy Card: Allows registered shareholders to participate in voting at a meeting whether or not they attend.

Proxy Statement: A statement required of a firm when soliciting shareholder votes, which is filed with the SEC in advance of the annual meeting using Form DEF 14A.

Proxy Voting: The process by which an owner of a security provides authority or power for a person to act on his or her behalf in voting corporate shares of stock.

Quorum: The minimum number of shareholders that must be present or represented by proxy at an annual or special meeting in order to transact business at the meeting.

Record Date: The date established by a public company for the purpose of identifying the shareholders who are entitled to vote at a shareholder meeting.

Registered Shareholder: An investor who is in possession of a stock certificate in his or her name and receives dividend checks directly from the issuing company.

Routine Proposal: A standard matter such as board of directors elections or ratification of independent auditors that doesn’t change the rights and privileges of a stock.

Rule 30e-3: An SEC rule that creates an optional “notice and access” method for delivering shareholder reports.

Securities and Exchange Commission: A federal agency that holds primary responsibility for enforcing federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other electronic securities markets in the United States.

Shareholder of Record: The legal owner of a share of stock, but who may not be the person or institution who actually derives the benefit of the share.

Special Meeting: A meeting other than an annual meeting held whenever a corporation or fund complex makes changes to the board of directors and transacts business that requires shareholder approval.

Street Name Shareholders: An account containing securities held in the name of a broker or bank instead of the shareholder.

Super Majority: A requirement that 67 percent of outstanding shares must be voted in favor of a proposal for passage.

Tabulation: The act of counting shareholder votes cast for an annual or special meeting.

Transfer Agent: The entity responsible for keeping records of who owns a company’s stocks and bonds.

Trustee: A member of a board elected or appointed to direct the funds and policies of an institution.

Voting Instruction Form (VIF or aka Proxy Card): An item included in the set of proxy materials made available to beneficial shareholders in advance of annual and special meetings.