September 30, 2007
To: Nancy M. Morris, Secretary, U.S. Securities and Exchange Commission,
100 F Street, NE, Washington, DC, 20549-1090 Comment on File Numbers S7-16-07, S7-17-07
With all my respect to ongoing attempts of Security and Exchange Commission to facilitate shareholders access to company financial reports and disclosures. New SEC proposals contained in File Numbers S7-16-07 and S7-17-07 can cause opposite results. The controversial nature of these proposals can complicate shareholders' rights. Proposal S7-17-07 would affect shareholders rights to file proposals to the company and requirements to include these proposals in the company's proxy materials. At the same time, proposal S7-16-07 would allow shareholders to nominate their own candidates for the board of directors, and at the same time will complicate an execution of their rights by setting 5% minimum requirement of ownership of company securities.
Proposal S7-16-07 could facilitate execution of shareholders' rights, but it needs to be revised and rewritten:
- Shareholders still should have a right to address important concerns regarding company's governance and policies. The right of the company to "opt-out" should be revised, because it will give most unresponsive companies a chance to "opt-out".
- 5% ownership threshold is not appropriate for most of the companies, because it would effectively block some shareholders and shareholders' groups from using their rights. This percent should be lowered.
- Implementation of chat rooms and electronic forums are welcome approaches for enhancing communication with investors, but it shouldn't substitute current proxy process.
- The raising of shareholder resolution resubmission levels from the current 3%, 6% and 10% vote levels to l0%, 15% and 20% levels will also complicate the process of resubmission.
All of the above should be revised by SEC and new updated proposition should be provide for public opinion.
Sincerely,
Linara Zakirova,
Los Angeles, Ca.