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Mediant Launches Proxy Service for Brokers
November 18, 2008
Mediant Communications announced today that it has introduced a proxy mailing and voting service for broker-dealers and signed Legent Clearing, an Omaha-based correspondent clearing firm, as its first customer.
New York-based Mediant will deliver ballots and meeting materials by mail and electronically to the 100,000 shareholder accounts of Legent’s correspondents--retail, institutional and discount brokerages. Mediant will also deliver notices of corporate reorganizations, as well as prospectuses and interim reports of mutual funds.
“As an independent provider of clearing services, we aim to give our correspondents the best possible service, with best-of-breed technology and customized solutions,” said Ray Maratea, co-president of Legent Clearing. “Mediant shares our aim and we are extremely pleased to partner with them.”
Mediant founder and president Arthur Rosenzweig said the new service is designed to provide financial intermediaries with an alternative to Broadridge Financial Solutions. Formerly the brokerage services group of Automatic Data Processing, New York-based Broadridge, which spun off last year, is the largest third-party proxy mailing and voting provider in the U.S. “Broadridge is a formidable competitor, but the proxy business is changing and a monopoly is no longer appropriate,” asserted Rosenzweig. “Advancements in technology have lowered costs and as more investors migrate to online proxy distribution and voting, competition will increase.”
Maratea said that Legent, a Broadridge client since 2001, opted to switch because Mediant can accommodate proxy mailings to beneficial shareholders and has technology that makes it easier to comply with the Securities and Exchange Commission’s notice-and-access rule. Under the rule, large accelerated filers--those with more than $700 million in market capitalization--have to make proxy materials available online; all public companies will have to do so by Jan. 1.
“We found Mediant to be a very aggressive firm and ultimately matched what Broadridge could offer,” said Maratea. “One of the differentiating factors is they allow our correspondents to private-label the delivery of proxy materials through their Web sites in a customized fashion.”
Broadridge declined to comment on Mediant, but in a statement issued to Securities Industry News, Chuck Callan, SVP of regulatory affairs, said: “We are deeply committed to making the investments in technology, processing and human capital necessary to continue to be a leader in the services we provide while exceeding our clients’ expectations.”
This is the second time Rosenzweig has been involved with a Broadridge competitor. In 1994, he joined Proxy Monitor, a New York-based proxy research provider, as president and began offering a voting service for institutional investors in an effort to take business away from Broadridge’s ProxyEdge. Proxy Monitor in 2001 acquired Institutional Shareholder Services (ISS) from the former Thomson Financial in a reverse merger and adopted its name; Rosenzweig left following the deal. Last year, RiskMetrics Group bought ISS for $550 million.
In 2002, Rosenzweig and his partners in investment firm Research Partners founded Mediant, which since 2006 has been doing electronic voting and proxy mailing work for registered shareholders. The company services 250 issuer clients through a proxy mailing facility at an undisclosed location in New Jersey and an information technology center in Cary, N.C. For the last three years it has been developing the new service with 25 broker-dealer clients. Legent’s book of business, said Rosenzweig, is the ideal size for the service’s first customer.
