Texas Stock Exchange tweaks uninstructed share voting rules
Published Date: 9/11/2026
Notice
Summary
The Texas Stock Exchange wants to change its rule about how shares without voting instructions get voted. Members holding shares must now vote these uninstructed shares in proportion to how other owners voted. The SEC is reviewing this change and will decide by September 9, 2026, which could impact how shareholder votes are counted and managed.
Analyzed Economic Effects
4 provisions identified: 2 benefits, 2 costs, 0 mixed.
Brokers Must Proportionally Vote Uninstructed Shares
If a registered broker-dealer (a "Member") holds TXSE-listed shares for a beneficial owner and that owner gives no voting instructions by the Member's Calculation Date, the Member must submit a proxy to represent those Uninstructed Shares and vote them on each proposal in the same proportion as instructions actually received from participating beneficial owners. Any fractional allocations are rounded down to whole shares and any remainder shares are voted as ABSTAINING; the Member must keep records of the allocation method under Exchange Act Rule 17a-4.
Investors' Instructions Drive Uninstructed Votes
If you own equity securities with their primary listing on TXSE and your broker holds them in its name, any voting instructions you send by the broker's Calculation Date will be used to determine how that broker votes Uninstructed Shares: the broker must allocate Uninstructed Shares for each proposal in the same proportion as the votes received from participating beneficial owners. If no beneficial owner gives any instructions for a particular proposal, the Covered Member must vote all Uninstructed Shares as ABSTAINING for that proposal.
Stakeholders Warn of Governance Distortions
Some commenters told the Commission that the proposal could distort proxy voting outcomes, circumvent majority voting when few shareholders vote, and weaken investor-rights protections for shareholders of TXSE-listed companies. The Commission is soliciting further comment to assess whether the proposed rule is consistent with Sections 6(b)(5) and 6(b)(10) of the Securities Exchange Act.
Fiduciary and ERISA Accounts Excluded
The proportional allocation rule would not apply to shares voted by a Member acting as an executor, administrator, guardian, trustee, or similar fiduciary, nor to shares voted by a named ERISA plan investment manager or by a designated investment adviser; such shares are excluded from the Instructed Vote Distribution and the proportional calculation.
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