SORRY to bore you with this arcane discussion about cookies, but I’m continuing to hear from vendors who claim companies cannot use any cookies on websites hosting their proxy materials.
This is nonsense and the people pushing this line of thinking — and I’m talking about a lot of different people — either aren’t paying attention or they’re deliberately trying to confuse companies for their own ends. Perhaps both.
You might recall that this issue came up after I saw a presentation in which a representative of Broadridge Financial Solutions tells the audience they have to post their proxy materials on a “cookie free” website. (Others are telling firms the same thing.)
That might sound right, but if it was — and it’s most definitely not — then Broadridge itself is currently breaching the SEC’s rules. That’s because they themselves are using cookies on the websites they use to host their clients’ proxy materials for eproxy.
Look at the screenshot below. It shows you information about the cookie that was set to my browser when I visited www.investorEconnect.com, the domain Broadridge uses to host its clients’ proxy materials.
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| Broadridge’s own domains provided for eproxy services use cookies, even while the company’s sales people are telling their clients their websites must be “cookie free.” |
So are Broadridge and its clients breaching the SEC’s rules around cookies?
No they are not, and here’s why:
The SEC’s rules state you cannot “infringe on the anonymity” of people who access the website hosting your proxy materials. In other words, you cannot use any method to learn the identities of users on the website hosting your proxy materials. That includes, but is not limited to, using cookies that contain identifying information.
However, there is no universal ban on cookies. Anonymous cookies, those that do not contain information that would enable you to identify a user, do not infringe on shareholders’ anonymity and therefore are not a problem.
And that is why Broadridge can use cookies on its Investor E-connect website and other proxy related sites; because they are using cookies to ensure that users can use the website and get the information they need, not to infringe on shareholders’ anonymity.
This is similar to how most companies uses cookies on their websites, the same websites that some service providers now want companies to believe are not fit to host proxy materials. Why are service providers telling companies this? In part it’s a consequence of selective reading of the SEC’s statements, but it’s also because vendors would like companies to rent server space from them at exorbitant rates.
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| Broadridge is also using cookies on its StreetLink domain. This hosts some companies’ annual meeting materials. |
Now, to be sure, some companies do need to be careful because their websites do use impermissible cookies that contain personally identifiable information. Clients of Shareholder.com, for instance, should pay attention.
But most firms don’t have a cookie problem and don’t need to rent server space from a proxy service provider. And they don’t need to purge their sites of anonymous cookies or set up separate cookie-free sites.
It’s an unnecessary expense, and ultimately counterproductive because permissible anonymous cookies actually help companies to provide better user experiences for investors in a number of ways, some of which I mentioned in the earlier post.
One more thing to think about: If you work for a public company, you really have to be on your guard for the BS and misinformation that service providers dish out. You also need to read the rules closely and ask questions. If more people did this, we’d have better, clearer rules.
In that vein, I recommend you pay careful attention to what the SEC has said about the formatting requirements for online versions of proxy statements and annual reports. None of the big vendors seem to have read this properly either.
Note: Certain comments on this post have been deleted.
Dominic Jones (bio) created IR Web Report in 2001. He is a consultant to leading public companies and investor relations service providers worldwide. You can contact him via the contacts page.
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