runninginvestor wrote: ↑Sat Nov 27, 2021 8:57 am
anon_investor wrote: ↑Sat Nov 27, 2021 8:27 am
runninginvestor wrote: ↑Sat Nov 27, 2021 8:00 am
000 wrote: ↑Fri Nov 26, 2021 11:27 pm
shess wrote: ↑Fri Nov 26, 2021 11:25 pm
I think it would be interesting to have a proxy layer where you can elect your shares to be voted by a third party. The obvious level would be with individual stocks, but once implemented you could reasonably extend this to vote the shares within an ETF or mutual fund.
Agreed.
How much cost do you think this would add? (Ie 1 basis point, none, more?)
Id be curious how this would ever be implemented for fractional shares. And what are the odds that I hold 10 shares of AAPL but they are actually 20 half shares that the company pieces together from other fractional traders? Would I not get a vote since I don't actually hold a single share in the company?
Don't you still own whole share, it is just fractional for tax lot purposes?
That's what I don't know how it works for voting. I'm actually curious, not trying to be contrarian or anything. If cumulatively I own intX shares but they are all individually a fractional share, are you allowed to vote as if you owned 1 share outright? I know generally fractional shares don't allow you to vote, but that's when they come by splits/dividends where you presumably initially bought in whole shares.
I actually don't know how fractional shares work, since I've not had them. My understanding is that fractional shares may not have voting rights, depending on how your broker firm handles them. Which makes sense, because fractional shares are most likely just a bookkeeping notation your brokerage keeps (I mean, your brokerage has netted together fractional shares and records them against a real shareholding in street name).
I think this kind of proxy assignment could actually work better than the status quo for fractional shares. My assumption would be that various providers would have to register their ability to vote, then you would assign your shares, then that would aggregate at the brokerage level. So if a bunch of holders of fractional shares at Etrade selected the same proxy strategy, that could sum up to full shares electing that strategy, rather than being lost in the noise. Likewise with ETFs, the number of proxies would likely be smaller than the number of shareholders, so the resulting groupings would likely aggregate into bigger chunks.
As far as cost, I guess that's a concern. I don't think it would add much overhead at the brokerage level compared to the existing ability to hold shares in street name and still map notices and votes to shareholders. But funds would obviously have an additional cost of mapping things. 1bp seems a bit much to me, though, since it would only work if automated into their accounting system. They'd have the cost of building the automation, but the ongoing cost shouldn't be that high (maybe even cheaper, because you have offloaded the need to even evaluate the issues being voted on). And you could just put it on "the blockchain" and then it's all pixie dust and unicorn farts from there on out.