The Shareholder Ownership Transparency Alliance (SOTA), is an alliance formed for the purpose of eliminating the Objecting Beneficial Owner (OBO) classification to allow publicly traded companies equal access to all their shareholders.
An Objecting Beneficial Owner (OBO) is a shareholder who has chosen to object to the disclosure of their ownership information to the company in which they hold shares. OBO shareholders do not have their identity and contact details shared with the issuing company they are invested in. As a result, the company may not have direct access to their information and will rely on third party technologies to communicate your voting preferences without passing on your details to the issuer of the securities you hold.
Under the current OBO/NOBO system any type of shareholder can hide behind an OBO registration.
A Non-Objecting Beneficial Owner (NOBO) is a shareholder who holds shares of a company through a brokerage or financial intermediary and has not objected to having their identity disclosed to the company. NOBOs are typically entitled to receive shareholder communications directly from the company, such as proxy statements, annual reports, and other corporate materials. Companies or their representatives can communicate directly with NOBO shareholders and take voting instructions through phone, text, chat email and social media.
Leveling the Playing Field of Corporate and Shareholder Transparency
Analysis by Joseph Caruso – CEO Alliance Advisors LLC.
Over the last several years, government agencies, institutional investors, and proxy advisory firms have been seeking greater corporate transparency in public filings to build trust and improve corporate governance. However, such efforts would be better served on a level playing field, as currently not all shareholders are required to play by the same rules of transparency.